Digitalisation has gradually permeated South Africa's insurance sector

While the insurance sector has been amongst those most severely impacted by digitalisation across the globe, the sector has now emerged among the frontrunners when it comes to adapting to new technology, according to a new survey from global professional services firm PwC.

The sector’s operations are characterised by highly complex business processes that have been institutionalised over a protracted period of time. These practices have been ingrained in the sector, which has compromised its agility and flexibility when it comes to riding the digitalisation wave.

A number of insurance firms in South Africa are still transforming these practices, and have been averse to adopting the latest technology to help with this process, primarily due to the heavy costs involved. However, this scenario appears to be changing, according to analysis from PwC.

The firm conducted a survey amongst insurance executives across the globe, a number of which are located in South Africa. The percentage of these executives that is concerned with the pace of change in technology and consumer behaviour has considerably declined over the last year alone.

In South Africa, a growing share of the business environment – including the small and medium enterprises sector – has been willing to invest the cost required to digitalise their operations, primarily to remain competitive. This trend has extended to the insurance sector as well. 

Commenting on the findings, Long-term Insurance Leader for PwC Africa Victor Muguto said, “Until recently the insurance industry was one of the world’s most disrupted sectors. The pace of technological change and shifts in consumer behaviour led to a new wave of competition that many insurance companies found threatening.”

“Yet, the responses from survey respondents show that initial apprehension over digital transformation is turning into optimism. According to the survey findings, concerns about technological change and other disruptive elements have eased considerably,” he added.

Pieter Crafford, who is the Financial Services Advisory Lead for PwC South Africa added, Consumers want flexibility, simplicity and personalisation in the products and solutions they are offered as well as choice in the channels through which they interact. Both the amount and precision of available customer intelligence are growing to make this possible. A key global development is how insurers are partnering with technology companies and platform providers to create new value propositions and better experiences for customers.”