Insurers must not fear e-commerce thinking

​The march of technology and digital change has not spared any industry, and adapting to the new pace of change is a defining strategic pressure of the last quarter century. The innovation cycle that has disrupted so many industries follows a now familiar path: innovation, disruption, adaptation, and new growth.  

For insurance, there is now an opportunity to leap past the expensive early steps of “creative destruction”. Best practices and mature enterprise-level tools that answer the digital question are emerging at the same time.

An exceptional example is aYo in South Africa—a company whose success showcases the value of thinking outside the box and using technology as a basis for business. aYo’s origins from within MTN, a telecommunications company, might lead some insurers to dismiss its applicability to existing insurance ​​companies, but its success is less about “coming from telecom and tech” and more about recognising that they could leverage available tech tools—in this case solid e-commerce frameworks—to sell a new service to customers they already had access to.

aYo offers hospital cover and life insurance products to users and subscribers of MTN Mobile Money, a mobile banking solution. Users dial a Quick Code to begin the registration process, and premiums are deducted through airtime or mobile money. The service is available in more than six African countries and continues to grow.

Roughly three years after the launch almost 10 million policy holders have been registered, with minimal transaction costs. Mobile insurance is now considered the most efficient way to reach the African market.

Underneath it all the backbone is a technology and sales platform that is scalable in practically no time and works like a modern e-commerce suite rather than a traditional insurance core system.

The tech tools that power businesses such as aYo share a few key features that set them apart from traditional core systems. They all can quickly and directly exchange data with customers and distribution channels in real time and are available 24/7.

Meeting these norms by upgrading legacy core systems will not be enough. Only companies which make profound use of new available technologies will have a chance to win the race for keeping and winning end-customers. Today’s consumers value fast, accessible and direct servicing more than a brand promise, which cannot be experienced online.

E-commerce requires excellent processes in the frontend and backend, offering broad ranges and configuration options for products and processes as well as a lean and scalable platform for purely digital end-to-end sales and service processes. This assertion still seems forward-thinking for insurance, but other industries have long been using powerful online shop systems that offer exactly the right features required to satisfy customers.

Quality and speed of customer service are the focus of all activities—and the leaders of this change for insurance are already leveraging the type of tools that power the sales channels for the world’s biggest businesses.