The Future of Insurance


The COVID-19 pandemic has forced many insurers to speed up their digital agendas. According to a recent global survey of insurance CEOs conducted by KPMG International, COVID-19 has been the digital catalyst insurers so dearly needed. The change has been nearly universal. 85% of insurance CEOs said COVID-19 had accelerated the digitisation of their operations and creation of next-generation operating models; 78% said the pandemic had turbo-charged progress on the creation of a seamless digital customer experience; 79% believed it had brought new urgency to the creation of new business models and revenue streams.

The level of discussion and hype around InsurTech, Digital and Innovation remain high within the insurance industry. While the market is saturated with points of view and opinions on what is possible with respect to re-imagined personal lines products, there is limited fact-based actionable insight on what consumers actually want. 

The role of technology

Insurance is one of the biggest markets in the world, valued at US$4.73trillion in 2016 with a growth rate of 3% per year. And while the influx of modern tech disrupting the market may have you worried, many insurers are adamant that this industry isn’t going anywhere. At the same time, the insurance industry can’t run from the changes heading toward it with blinding speed.  The revolution of the century is setting foot in the insurance business.

According to the Institute of International Finance, a variety of breakthrough technologies are set to spur a fundamental transformation of the insurance industry. Cloud computing, the Internet of Things (IoT), advanced analytics, telematics, the global positioning system (GPS), mobile phones, digital platforms, drones, blockchain, smart contracts and artificial intelligence (AI) are providing new ways to measure, control and price risk, engage with customers, reduce cost, improve efficiency and expand insurability. These technologies are also enabling the creation of new insurance products, services and business models.

New Trend

Until recently, insurance has been a virtual island in a sea of technological change. While new players worked to disrupt banking and wealth management, insurance seemed to be operating much as it had for decades. That era of relative stability has ended with the increasing deployment of advanced sensor technologies and related services. Insurance is now, like other major industries, grappling with the risks and opportunities of new technologies. So, what can be done to improve the customer experience? Digital technology has been cited as the answer to not only some of the consumer’s most hated aspects of insurance – such as the speed of paying a claim, but more importantly to offer new experiences which will change how we look at insurance.


The digitisation of insurance has been happening for some time. The huge change in people’s experience of digital servicing in fast-moving consumer goods has led to a justifiable rise of expectations in insurance. Customers under the age of 40 expect to use their mobile devices for all commercial and personal interactions, and consider letters and shops to be from an analogue age. It’s imperative that insurers provide the optimal digital customer experience if they are to remain engaged and relevant with their customer.

The rise of the smartphone has been a key disruptor in changing the industry’s dynamics, in terms of channels to market, pricing and promotion. From initial quote to making a claim, to booking any necessary repairs, everything can be done online – which keeps costs low and makes the customer feel in control. Digital transformation isn’t simply about insurers making better use of technology. It’s about enabling their people to accomplish more with technology.

Artificial Intelligence

Artificial intelligence (AI) enables software to exhibit human-like intelligence: including learning, planning, reasoning, problem-solving and decision-making.  AI is quickly becoming increasingly proficient at performing tasks which have historically been difficult for computers to execute. But a much bigger trend is the support that technologies like artificial intelligence will provide – enabling insurance professionals to spend less time on routine admin tasks and more on adding value, engaging with customers, solving problems and making better decisions. Moving forward, the technology could help insurers enhance automation, reduce risk and expense, increase productivity, and facilitate better and faster decision-making.

Deeper Relationships
According to David Law, insurance global leader at PwC: “Technology is going to be an important part of insurers’ ability to capture and analyse new sources of customer data and develop deeper relationships. Yet the real differentiator is how effectively this information is turned into insights and a readiness to lead innovations in the marketplace”. Flexibility and personalisation are the watchwords as companies learn to use customer information better; not just to cut costs by reducing premiums, but also to change behaviour and increase loyalty.

Customer Control

Customers are increasingly getting informed, and the number of options and channels they have are widening. Now, insurance customers can switch if they are unhappy with the services, or prices, they are receiving. Customers are increasingly getting used to the idea of having more control over their everyday live,s and many still feel the relationship they have with their insurers is one-sided. As customers’ behaviour continues to morph, there will be an increase in the number of consumers who explore and embrace new products and services of insurance. They will demand based on their needs and not what their insurers offer.

Customer Experience

The majority of insurers have been busy trying to reinvent their customer experience over the past couple of year;, however, customer engagement and opinion in this area is still relatively poor. Insurers will continue to bolster and invest in their efforts to improve customers’ end to end experiences, thus moving away from focusing on individual transactions to building frictionless and connected customer experiences. As insurers continue to make progress against their other inter-related, connected and digital transformation goals, they are expected to have an overall cumulative net benefit in premium generation and excellent customer services.


 A 2015 study by the World Economic Forum found that 58% of surveyed executives and experts from the information and communication technology sector believe 10% of global GDP will be stored on blockchain technology by the mid-2020s. Insurance industry observers, for their part, believe that the innovative distributed ledger could introduce a variety of improvements and efficiencies to the insurance landscape: including establishing a level of accountability and transparency, mitigating risk and fraud, streamlining back-office operations, introducing new products, lowering costs, and providing easier and improved data access to parties. Blockchain technology could eliminate error and negligence; and detect fraud by providing a decentralised digital repository to independently verify the veracity of customers, policies and claims.

 Claims handling

Customers expect more efficiency and transparency with claims, and they expect to have several channels for submitting and settling claims. As customer expectations continue to change, insurers must reimagine the role of claims. Carriers and start-ups can form mutually beneficial partnerships wherein the start-ups will benefit from insurers’ experience and insurers benefit from start-ups’ innovation and flexibility in order to integrate more services into the claims function. A good example is introduction of the ‘Digital Half-Day Claim Payment’ by Vanguard Assurance in Ghana. This digital technology by Vanguard Assurance seeks to offer prompt claim payment service as part of its resolve to boost confidence in the insurance industry, and also complement moves to digitise the insurance sector in Ghana.


 The trend that probably receives most publicity is the introduction of disruptive technologies such as blockchain, digitisation, robotics and artificial intelligence. These innovations have not always been developed to meet a specific customer need, and the best commercial uses for blockchain apart from Bitcoin are yet to be fully exploited. A number of startup insurance intermediaries are using AI to carry out analysis and suggest tailored insurance products based on a detailed knowledge of the customer’s background. This approach uses Big Data and machine learning technologies, and raises issues about data protection.

One of the biggest criticisms to have been consistently leveled at the insurance industry over the past few years is its pace of change; but then again, the same can be said about some of their peers in alternative sectors. As Ghanaian insurers continue to invest in transforming their core systems and re-wiring their digital fabric, their pace of change within the industry should be accelerated. Macroeconomic, sociopolitical factors and change in the regulatory environment will continue to act as anchors.


Gideon  is an experienced underwriter who works with Activa International Insurance..

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Contact: 0246972495 / 0555864286

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