Zim insurers miss digital train

PHILLIMON MHLANGA

Zimbabwe’s insurance companies are missing out on huge benefits that come with digital transformation and disruptive innovation with local players moving at a slow pace to benefit from the digital dividend.

Insurers worldwide that have undertaken core transformation to digital, have generated value by embedding digital capabilities into their business models. This has not been the case with local insurers.

Board chairperson of the Insurance and Pensions Commission (IPEC), Lynn Mukonoweshuro, warned local insurance companies that they must seek digital routes that will help them achieve profitable growth amid unprecedented economic and financial crisis prevailing in Zimbabwe.

“Until we can offer a true digital basic service to our customer, we will not be able to enjoy the benefit of these transformational technologies and capture the next generation, local insurers must accelerate their pace of adoption,” she said.

“Our local market is moving far too slow. Most of the big players are only offering partial digital processes.

This may be because of the cost of replacing some of the legacy back end systems that do not lend themselves to real time online processes.” Mukonoweshuro said she is “an avid follower of the insuretech trends that are disrupting the international markets such as the blockchain, the internet and the internet of things and big data to name a few”.

She said a number of insurance companies were not getting the results they desired because of the new competitive threats, cost pressures, increasing regulatory requirements and generally lacklustre financial performances, among other forces.

The players, therefore, should accelerate their pace of adoption of technologies such as the blockchain, the internet of things and the big data, or they might lose relevance. Failure to do that, they might also find it difficult to capture the next generation, Mukonoweshuro said.

She said the threats demand a significant change and entirely new business model, centred on technology and disruptive innovation. This means that insurers should undertake digital transformation, as a matter of urgency because of ever rising consumer expectations.

Analysts said the local insurance sector’s lagging behind position in terms of embracing digital transformation, was negatively impacting on the development of the sector.

“A couple of decades ago, Zimbabwe insurers were competing favourably with the rest of the world on their quality of technology systems and customer services. Unfortunately, we are now lagging behind quite significantly in our adoption of digital technologies,” Mukonoweshuro said.

“In the developed markets, virtually all insurers now provide a complete online process for quotes and purchase process. In addition to their traditional services models, they also provide a completely online customers service platform allowing customers to self-service for basic contract amendments and renewals.”

 

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