CAPE TOWN – The buying preferences of consumers are radically changing and traditional life insurance providers are battling to keep up with the pace of change in consumer behaviour.
Lee Bromfield, the chief executive of FNB Life says about 44 percent of life insurance quotes generated on our digital channels in January this year were processed after hours when traditional customer service channels were closed. In January 2019, FNB Life generated more than 20 000 quotes worth more than R35 billion of life insurance cover on FNB’s digital channels.
“It’s vital that life insurance providers take full advantage of technological advances to effectively distribute life insurance products to consumers. Consumers have the upper-hand to force providers to accelerate the pace of change and we are already seeing this through the consistent growth in our digital interactions on life insurance products,” adds Bromfield.
He identifies consumer-driven trends that are forcing traditional life insurance providers to embrace digital disruption:
Rising mobile penetration – according to GMSA, which represents the interests of mobile operators globally, South Africa is a fast grower market in Southern Africa with 98 million mobile connections. This puts pressure on life insurance providers to rapidly enable access to life insurance through convenient mobile channels.
Smart-technology adoption – the swift adoption of smart technologies is one of the hallmarks of the modern era. Smart technology provides consumers with real-time data which may require them to constantly review decisions about their lives, including life insurance.
Do-It-Yourself (DIY) culture – the digital era has enabled consumers to do most things on their own and all they require is a reliable platform. While still behind, the life insurance sector is ripe for consumer-centric disruption.
Health and fitness boom – consumers’ focus on healthier lifestyles demands, increased agility from life insurance and health providers. This means providers need to enable policyholders to manage their policies as and when their lifestyles change.
Value-for-Money – The DIY culture among some consumer groups comes with an expectation of reduced service costs and adds pressure on providers to demonstrate the value they add to policyholders. This is why value-added incentives have become part and parcel of life insurance decisions.