How will the personal insurance landscape evolve in 2022?

Published Feb 16, 2022


By Dominique Bowen

If there’s anyone whose brain you should pick about the evolution of financial services especially in the South African landscape, it’s Berniece Hieckmann. With more than 25 years of experience in banking and insurance – including time as business architect at FNB and in various roles at Momentum Metropolitan – she now heads up Metropolitan GetUp, which focuses on financial services for younger, digitally minded consumers. She discusses the stand-out trends we can expect to see in the personal insurance world, and what these mean for insurers and consumers alike.

Empathy is the competitive edge

No matter how quickly digital is adopted across the booming insurtech or more established traditional insurance worlds, consumers are still looking for the warmth and understanding you can really only gain from real-life interactions when there’s been, say, a death in the family, or a home invasion. And yes, this applies to historically digitally driven Gen Zs and millennials, too. “Our research shows that these groups have noted that they far prefer these real-life interactions for high-stakes situations,” says Hieckmann. “Machines cannot create the warmth needed to reduce anxiety and get someone in a stressful situation to a level of comfort where they can proceed to make more functional choices and decisions.”

To stand out as an insurer who embraces this gap, Hieckmann says businesses need to know when to provide the efficiency of digitisation versus the comfort of human engagement. A new emphasis on a far more integrated, seamless service channel experience, as opposed to simply adding new digital channels, is an important consideration here.

Goodbye to the middleman … as we know it

“As digital innovation removes traditional friction points that advisers and brokers were once enlisted to streamline and simplify, they will have a choice – identify new friction points and reinvent their service, or become marginalised,” says Hieckmann. The success of an intermediary depends largely on their entrepreneurial ability and instinct, she adds, so as long as their time is still valued, there will be new opportunities to intermediate at different parts of a value chain. “We need to plan for tomorrow as much as we need to plan for retirement,” notes Hieckmann. People need an agile navigation road map rather than just a destination plan, and those who can provide short-, medium- and long-term advice solutions will keep their doors open.

As for insurers, a priority needs to be consumer education to aid (and be considered relevant in) the decision-making process. “Insurers will need to provide clients with all of the information required to reach a purchasing decision about a product, without the cost and possible hard-selling bias often seen in traditional sales channels,” says Hieckmann.

The privacy vs personalisation sweet spot

Is enjoying the right to data privacy and the perks of personalisation an unachievable pursuit? No, says Hieckmann; understanding this dichotomy comes down to the domain of ethics. “A simple rule of thumb is that you can know anything about a consumer and do anything with this knowledge as long as they know about it and want you to do it,” she says. “​​Constant discourse with consumers that shows them how their information can be used to empower them with better solutions is needed.”

This all goes towards building trust in brands – a commodity that is hard earned but easily lost if the customer’s needs aren’t central to an insurer’s value proposition. “How we create this empowered transparency for consumers is as much a part of design innovation as any other aspect of an offering. Drowning consumers in legal disclaimers and lengthy procedures doesn’t help anyone,” says Hieckmann. “Similarly, duping consumers into engagements and sharing of information decimates trust – the foundation of the insurer-client relationship.”

Consolidating cover

Covid-19 has played an undeniable role in how we view mortality, and consequently how we plan for it. As Hieckmann puts it, the bill it has left with us is a big one, and will have to be paid in many instalments. Therefore, consumers really have to re-evaluate where their money goes each month: is every rand working its hardest? Is there any waste?

“Several new players have entered emerging market insurance, resulting in a growing number of clients who may be ‘over-exposed’ in terms of their funeral cover,” says Hieckmann. What this calls for is a consolidation of risks, whereby those who have two or three policies with similar coverage need help to consolidate them at a lesser cost to free up pockets of income.

Finally – and here’s where personalisation and tailored solutions are top of mind – there will be a demand for partial insurance. Long- and short-term insurers needed to rise to it with more granular, flexible solutions to suit the needs of those who could do with the option to prioritise the risks they’d like to cover, and when.


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