Trends That Should Be Adopted By Insurance Companies
Fri, 09 Feb 2024
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Adris Digital Africa
Life insurance is a crucial part of financial planning that the Ugandan citizenry is slowly embracing. Life insurance provides financial security to the family members of an individual in case of their untimely demise. It goes without saying that the insurance companies have put in the work in as far as innovating and educating the masses. But there is still a lot to be desired. Over the years, the insurance industry across the world has undergone a significant transformation, with new trends emerging across the world. In this article, we will explore some of the emerging trends in life insurance across the globe that can be borrowed in the Ugandan Market.
Digitalization of Insurance Processes
The rise of technology has revolutionized every industry, including insurance. Digitization of insurance processes has made it easier for policyholders to buy, renew, and manage their insurance policies. Digitalization has also made the insurance buying process more convenient, accessible, and cost-effective. Many insurance companies now offer online policies, which can be bought directly from their websites or through third-party aggregators.
Digitalization has also brought in a lot of transparency in the insurance industry. With online platforms providing easy access to information about various policies, premiums, and claim settlement ratios, policyholders can make informed decisions about which policies to buy. Insurers are also using technology to simplify claim settlement procedures, making the entire process faster, hassle-free, and more efficient. Companies like UAP Old Mutual that are reputed for superior customer experience systems already provide multiple payment options from bank, financial cards, mobile money and more recently, platforms like Flexipay. All these serve the purpose of making the experience better.
Personalization of Policies
In the past, life insurance policies were one-size-fits-all products. However, with changing times, insurance companies are now offering customized policies that cater to the unique needs of different individuals. Personalization of policies has become an emerging trend across the world, with insurers offering tailor-made policies based on the policyholder’s age, lifestyle, and health status.
Insurance companies are now using data analytics and artificial intelligence to gather information about policyholders’ lifestyles, health conditions, and other factors that can impact their life expectancy. Based on this data, insurers can offer policies that are more suitable for the policyholder’s needs. Personalized policies can offer better coverage at a lower premium, making them more attractive to policyholders.
Inclusion of Wellness Programs
Insurance companies are now offering wellness programs that encourage policyholders to adopt a healthier lifestyle. These programs provide policyholders with incentives to maintain a healthy lifestyle by offering discounts on premiums or other benefits. Wellness programs can include activities such as regular exercise, maintaining a healthy diet, and quitting smoking.
The inclusion of wellness programs is a win-win situation for both policyholders and insurers. By encouraging policyholders to maintain a healthy lifestyle, insurers can reduce their claims costs, resulting in lower premiums for policyholders. At the same time, policyholders can benefit from a healthier lifestyle, leading to a better quality of life.
Use of Big Data Analytics
With the availability of vast amounts of data, insurance companies are now using big data analytics to gain insights into customer behavior and market trends. Big data analytics enables insurers to identify patterns and trends that can help them offer better policies to their customers. For instance, by analyzing data on policyholders’ age, income, and occupation, insurers can offer policies that are more suited to their needs.
Big data analytics can also help insurers identify potential frauds. By analyzing claims data and identifying suspicious patterns, insurers can take proactive measures to prevent fraud. Big data analytics has also helped insurers reduce their claims processing time, resulting in a faster and more efficient claims settlement process.
Emphasis on Customer Experience
In the past, insurers were more focused on selling policies rather than offering a good customer experience. However, with increasing competition and changing customer preferences, insurers are now laying emphasis on offering a good customer experience. Insurers are now investing in technology to offer a seamless and hassle-free experience to their customers.
Customer experience has become a critical factor in the success of insurance companies. Insurers are now using chatbots and other digital tools to offer 24/7 customer support. They are also using social media platforms to engage with their customers and gather feedback about
Shift towards ESG Investing
One of the main ways ESG investing has impacted life insurance is by driving the adoption of sustainable investment strategies. Life insurance companies are now investing in companies that are committed to sustainability and have strong ESG credentials, such as those that are reducing their carbon footprint or have good governance practices. This has led to the creation of ESG-focused investment funds and products that are available to consumers.
Another way that ESG investing has impacted the life insurance industry is by influencing underwriting decisions. Life insurance companies are increasingly taking into account an individual’s ESG footprint when assessing their risk profile. For example, a person who engages in risky or environmentally damaging activities may be viewed as a higher risk and may face higher premiums.
Additionally, ESG investing has also led to greater transparency and accountability in the life insurance industry. Companies are now expected to disclose more information about their ESG practices and policies, and to report on their progress towards sustainability goals.
Overall, the shift towards ESG investing has had a positive impact on the life insurance industry, driving greater sustainability, accountability, and transparency.
Date
May 02/23
Publication/Platform
New Vision
Title
Gov’t Urged not to relax on oxygen infrastructure.