Insurance companies that will survive in the future must acquire or collaborate with InsurTechs for better service delivery and customer satisfaction.
This has become necessary in view of the growing influence of digital technology across sectors, particularly in the financial services market that is driving innovation, performance and growth.
According to EY 2022 Global Insurance Outlook, insurers will look to collaborate with or acquire the most promising InsurTechs, as banks and asset managers will offer more protection products and seek to differentiate on holistic financial wellness value propositions, forcing insurers to choose between collaboration and competition.
The report also states that the insurance industry must seek to lead with purpose and live up to its highest aspirations, particularly in the wake of the COVID-19 pandemic.
Insurers had to be there for customers and undertook large-scale change quickly to make sure they could serve people in need – and they must continue to do so, particularly if they are to help the world prepare for increasing climate risk, the report said.
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Rotimi Okpaise, EY insurance leader for West Africa speaking on the report says the Global Market report aligns with expectations in West Africa.
According to him, Ecosystems (Banks, Telecoms, Insuretecs) are gradually developing in our region, aimed at expanding the insurance customer base and increase our low insurance penetration levels.
Okpaise said efforts are being made to engage customers better, know their needs, segment the customer base, develop, market, and sell affordable relevant products and in the process, increase the sector’s revenue base.
According to him, there are data-sharing regulatory hurdles to scale, but these are broadly deemed surmountable.
On multi-faceted disruptions, Rotimi said: “the COVID-19 triggered new workforce needs and the industry adapted reasonably well through investing in technology and adjusting terms of employment.”
He said these needs are however continuously changing, and the dearth of skills across many industries has led to a war-on-talent and more flexible employment terms.
The insurance industry will need to be agile and flexible in these regards if it is to retain he noted needs to attract good talent.
“Whilst ESG activities are not dominant in industry deliberations, the Industry was visible at the height of the COVID era leading us to expect some companies to soon develop purpose led statements”.
The report further stated that the 2022 edition of EY’s Annual Global Insurance Outlook series reflects the dynamic and purpose-driven moment for the industry, focusing on open insurance and ecosystems, workforce transformation and sustainability.
Though these three especially powerful trends are currently shaping the market, there are also other areas where insurers are encountering compelling opportunities and, potentially, severe risks.
According to the report, insurers must continue to address their technology by digitizing core processes, migrating to the cloud and embracing flexible sourcing models.
The current landscape is also notable for its fragmentation; convergence and intense competition, including from a mix of non-traditional players and widespread collaboration.
