By KRIS SENANU
Last week, I had to re-new my insurance premiums and the journey begun from a call with the broker who asked that I take the car for valuation, after which he would send me the report. I would then be required to fill in some new forms, send the payment and wait another 48 hours to get my new sticker! This got me thinking about how very little has changed about insurance since I bought my first car 22 years ago. Actually, the only difference in the process is that my assistant is now able to pay using mobile money as opposed to queuing at the bank. If anything, the certificate was actually processed on the same day but the paper work seems to be a constant, or even more.
Ask anygikomba trader and they will tell you that in the literal sense, market place infernos are the greatest risk to their enterprises. This got me thinking about whether there could be a better and more convenient way to cover this risk and whether insurance companies and brokers alike were seeing this lucrative niche and ultimately whether they were configuring any products and services for this peculiar need.
I must admit that we are yet to see any solid, strategic thinking from the insurers looking at this same market as a new frontier in the delivery and consumption of their products. So whilst we delight at the seemingly organised way that our traders pool their resources to get back to business, it is amazing that no one seems to have seen this underestimated opportunity – bearing in mind the volumes of cash that change hands and the inherent risk that comes with being an ‘informal trader’ in our beloved country.
While we are all in agreement that each of the insurance products available in the market today have been designed to eliminate a consumer pain point whether frustration or loss, there needs to be a meaningful approach aimed at bringing this informal segment of businesses into the insurance fold.
Where is the killer App?
Currently, Kenya boasts of 37.8 million mobile phone subscriptions of which 28.7 million have access to mobile money transfer services. Given the trajectory, it is only a matter of time before the entire adult populace gains access to mobile telephony and therefore mobile money and the opportunity to deliver other smart solutions by way of mobile phones to their hands.
The increasing adoption of mobile technology therefore presents an opportunity to deliberate and make effort to interact with consumers in a bid to establish the best possible way to integrate technology into our products and services. What insurance companies need is an approach that brings together a combination of customer experience and engagement; digital and omni-channel distribution, claims management and products which bring together groups of people with peculiar needs to adopt a given product. So with this obvious reality of mobile penetration and adoption of smart applications, I am waiting for an app through which we can calculate premiums, assess risks and conclude the underwriting process.
Innovation – What it looks like
Steve Mendel, CEO – Owned by many is one man whose thinking concurs with mine; that the insurance sector although one of the oldest has recorded very little innovative strides if any at all over the past hundred years owing to a conventional approach. For the most part, product, price and channels have not changed much but an even greater misconception is that innovation in this sector requires ‘blue sky’ thinking; that great ideas will follow after creating the right environment for innovation. But in reality, I believe the process of innovation starts when we answer to existing needs.
The advent of mobile telephony and the creation of what I coined to be ‘personal (digital) space conversations’ (PSC) has seen us create email lists as parents in a school, a WhatsApp group comprising of all gikomba traders and an M-Pesa collection account for their bi-weeklychama. It is very clear that the way we package, communicate and deliver insurance products moving forward requires a tailored experience that matches the target consumer’s needs and risks.
Owned by Many identifies a group of people with similar needs; for instance entrepreneurs operating in the same risk area or even people with crohn’s disease who want to travel. They then work with insurance companies to create products that respond to those needs whether on the long term or short-term, thereby enabling access to insurance cover that would ideally not fit into conventional products.
Peculiar people, peculiar habits, need peculiar products
To many a pundit, this may simply be written off as aggregation or competition to the insurance provider, but to the consumer it is simply a case of daring to answer and address the insurance disparity that any provider keen on bridging this imbalance would be willing to collaborate on. As such, in the case of our traders that suffer perennial losses from fires, the innovative approach to this would be to have one of our providers, bring them together as sharers of this ‘niche’ risk, taking advantage of an available market and the existence of a network to offer even additional solutions peculiar to that sub segment.
Statistics from theInnovation Insurance Imperative reportby Deloitte 2015 shows that the advent of Internet of Things (IoT) has seen the growth of a certain generation of customers. For instance, Generations X and Y during the survey expressed their willingness to purchase insurance from technology companies.
This demonstrates that technology companies owing to their relationships with consumers have earned a place in the consumers’ minds as the go-to company for most of their utilities.
The report further goes to cite that technology companies have an unfair advantage over traditional insurance companies owing to their reputation and brand value. Customers have more satisfactory interactions with these brands compared to their insurance counterparts. On the foothold of things, I wait in anticipation for the day when an insurance provider will actually sign-up with one mobile phone service provider, where upon underwriting the risk profile of an individual or a group, then gets into an arrangement where monthly premiums are deducted from monthly airtime or from the mobile money savings account.
So in this case the epitome of innovation on the mobile platform could be charging a trader KSh10 a day as premium instead of KSh300 monthly which may be a huge demand on the trader’s part.
As opposed to spending time attempting to ward off competition, the key challenge for insurance companies is how they can create better client experiences through all the touch points of their processes. In order to do this, they need to invest in an ecosystem that allows for collaboration with telcos. I hope to see insurance providers derive value through Omni-channel retailing where they learn how to manage and leverage consumer data and then develop products to ride on that.
To earn the innovation title in insurance, we shall not be judged by how well we branded our products or the range availed in a single market but on the keenness of digital transformation. To abate the narrative on low insurance penetration, we need to arrive at more customer-centric products and services through differentiated channels.