South Africa: In the experimental stage
Although brokers continue to dominate the insurance market across Africa, the industry is quick to embrace digital solutions. As customer needs evolve, insurers struggle to strike the right balance between their legacy operations which contribute to a large revenue and the opportunities that the new digital landscape will generate.
Most customers still purchase insurance policies through financial advisors, insurance agents or brokers. However, a recent EY survey found that customers in South Africa are more likely to use digital channels to check and compare policies than their UK counterparts. The challenge remains of converting the browsing into a successful sale still prevails in these markets.
37% of South African customers use their mobile phones or computers for the initial process of browsing and identifying policies, according to Oxford Economics.
While mobile and digital applications are targeted to specific markets, such as funeral insurance, major initiatives are transforming back-office operations to become more cost-effective and reliable. Boosting the company’s back-office efficiency without endangering the brokerage relationship will be key. Traditional insurance firms have focused on making sales processes easier for the digital customer, but primarily in non-life products because of the strong position brokers and intermediaries still possess in
It is too early to judge success, but executives often need to explore the potential of a new distribution model. While most insurers see the benefits of digital strategies, only a few have implemented them. As digital sales increase, expect companies to launch products that enhance the customer journey.
Learn more details in our Future of Distribution in South Africa Report