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Online insurance product deluge from SA’s big banks

Read time 5min 40sec

South Africa’s big four banks this week upped the ante in launching online insurance products amid the COVID-19 pandemic.

This, as the banks have seen a massive decrease in consumers visiting branches amid the coronavirus pandemic which has claimed close to 9 000 lives in SA.

Insurtech start-up companies in SA have also been unveiling several digital insurance products that are disrupting the market.

This week, Absa and Standard Bank announced new digital insurance products.

On Monday, Absa Insurance launched an insurance product called “Activate” which, it says, provides consumers faster and affordable access to a specific range of insurance products, digitally.

“Consumer behaviour is changing, and a superior, digitally-enabled product and service offering are increasingly important, particularly as customers increase their take-up of digital channels during COVID-19, which requires social distancing,” says Dushen Naidoo, managing executive for insurance at Absa Retail and Business Bank.

Absa notes Activate insurance can be tracked via the Activate app, which is available in all major app stores.

It points out that customers seeking motor insurance receive a telematics-based solution which monitors driving behaviour and logs feedback via the Activate app. A rewards system offers customers up to 40% of their motor premiums in “cash-back” rewards based on good driving behaviour.

“We expect a strong growth trajectory. Offering a digitally-enabled short-term insurance product will be attractive to customer segments who prefer self-service functionality and the benefits of usage-based insurance,” Naidoo says.

Absa says the product was designed after extensive international research with insurtech, in an effort to stay in line with ever-evolving consumer expectations.

Naidoo says: “We are very proud of the offering that we have introduced to the market. Our intention is to create an end-to-end digital experience for customers to support them in keeping their families safer while insuring their assets seamlessly. By incorporating both Web and app functionality, we have managed to achieve this.”

Digital interactions

Also on Monday, Standard Bank Insurance, through its Direct Life Insurance Services division, said it is offering consumers the option of purchasing life insurance online.

In a first for the bank, Standard Bank says consumers can now purchase life cover, salary protection, disability cover, and serious illness cover by answering a few questions on its insurance Web site.

“There has been a growing need for a seamless online experience when it comes to life insurance,” says Chris De Klerk, head of life insurance innovation and solutions at Standard Bank.

“Our clients are increasingly interacting with us digitally, so building a solution that allows them to buy life insurance online was the next logical step.”

According to Standard Bank, the online, seven-step underwriting process takes about 15 minutes to complete. It is an extension of Direct Life’s phone offering which is delivered through its proprietary underwriting tool, it adds.

The process runs from an introduction to the terms and conditions of the service, through a set of questions about the applicant’s personal details and some underwriting questions. Then a quote is generated and if the applicant accepts the first quote, they are directed to a second set of underwriting questions, says Standard Bank.

Based on the answers to these questions, an official quote is generated which the applicant can accept, it notes, adding they are then furnished with the complete terms and conditions of their insurance contract and once they have read and accepted these, they can proceed to the checkout and pay for their new cover.

“The new online offering demonstrates Standard Bank’s commitment to empowering its clients through digital solutions,” says Peggy Sue Khumalo, head of Standard Bank Wealth SA.

“Online and mobile platforms allow consumers the convenience of being able to choose when and how they interact with a service or product. For us, innovations such as these embody our belief in putting choice in the hands of our clients every day and giving them the power to shape their financial future through a digital platform.”

Lee Bromfield, CEO of FNB Life.
Lee Bromfield, CEO of FNB Life.

Navigating COVID-19

In an e-mail to ITWeb, Lee Bromfield, CEO of FNB Life, says since the bank got its life insurance licence in 2015, it has introduced a range of life insurance products, including a comprehensive underwritten product range, funeral cover, credit insurance and a range of business insurance products.

He notes that during the COVID-19 lockdown, FNB’s focus was to find ways of offering meaningful help to customers during this very difficult time.

“Our focus, therefore, shifted from introducing new products to creating capabilities to streamline our claims processes,” Bromfield says.

“We built a digital claims process on the FNB app and on FNB.mobi to make it quick and easy for customers to submit and track their claims. We also built streamlined and automated decisioning in the backend to filter and pay valid claims as quickly as possible to assist our customers through this time.”

Bromfield notes FNB will continue to monitor and react to customers’ changing needs both through new product development and in tweaking the products that it already has on the market.

“We are well-positioned, being a part of FNB, to leverage the existing FNB channels and platforms for our insurance offerings,” he says.

“We have sales, servicing and claims capabilities available on our app across our range of products. We have created dynamic products that adapt according to our customers’ changing needs and we have leveraged robo-advice capabilities which we are looking to expand. We have also integrated into a number of key partnerships, including the home affairs department, to help streamline our claims process and proactively pay out claims.”

Anton Davies, head of client solutions at Nedbank Insurance.
Anton Davies, head of client solutions at Nedbank Insurance.

Supporting the systems

Meanwhile, Nedbank says it has plans to launch several online insurance products soon.

To support these digital solutions, Anton Davies, head of client solutions at Nedbank Insurance, says the bank will use a modern backend policy admin system, digital, data-based analytics, robotic automation techniques, artificial intelligence and machine learning.

“Understanding client needs and staying one step ahead of clients is critical in this environment,” says Davies.

“Providing personalised insurance solutions based on affordability will be the need of the hour. It also helps having a financial services provider that is looking out for you during these tough times.”

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