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More calls for insurance sector to embrace AI

Business
The emergency of the COVID-19 pandemic in 2020 left businesses without much choice, but to embrace innovation, mostly through digitalisation.

INNOVATION is the ability to see change as an opportunity not a threat, goes a saying by famous industrialist Steve Jobs.

The emergency of the COVID-19 pandemic in 2020 left businesses without much choice, but to embrace innovation, mostly through digitalisation.

While they were caught unaware, there have been consistent calls to encourage innovation to improve service delivery especially across economies’ financial services sector.

Over the past three or so years, Zimbabwe has seen a spike in digitisation of the banking systems which has seen the sector go paperless.

However, some sections of the financial services sector are still lagging; and one of these is the insurance and pensions industry.

In this era of artificial intelligence (AI), there have been intensified calls for this industry to move with the times.

Embracing AI and other innovations could result in an end-to-end solution for insurance claims as it can automate claim processing by analysing scanned documents and photographs, and comparing them with a policyholder’s contract to determine whether a claim should be paid or not.

At a time when Zimbabwe is battling insurance fraud, AI could reduce claim errors, enable insurers to process claims in minutes rather than weeks, and reduce costs.

Talking about innovation for smart-insurance development in Africa at the recent second Insurance and Pensions Regulators Retreat for Africa, director of Consultancy and International Relations at the Africa College of Insurance and Social Protection, Alnsemi Alnsemi said people were living in an era of rapid change accelerated by technology.

“Use of big data analytics can be used to identify new claim drivers. Al can enhance predictive or prescriptive underwriting techniques,” he said.

“When it comes to product design, you will (realise) that use of big data will reduce fraud and improve claims processes. Self-service apps improve customer post-sales experience, while blockchain applications can be used for smart contracts and claims administration.”

Alnsemi believes innovation is Africa's wealth and the continent's greatest potential is in its people.

“But technology is enabling new information flows disrupting the traditional insurance models. Each intermediary in the value chain is under increased pressure to justify its existence. Innovation is about finding new ways to serve the customer better,” he said.

“It is about ideas, processes, culture, action and innovation. The insurance industry needs to embrace this attitude to survive.”

Tanzania Insurance Regulatory Authority (TIRA) commissioner of insurance, Baghayo Saqware, said innovation for smart insurance development in Africa was a reflection of innovation as an essential aspect for insurance business as part of knowledge and experience sharing in insurance supervisory, regulatory and related matters.

“It is my sincere hope that the general and specific objectives of the retreat in understanding the innovation in distribution through sales agents force and bancassurance will be achieved through this presentation reflecting on practical experience from TIRA-(URT),” Saqware said.

ZB Financial Holdings Limited executive head of continuous development Tinashe Dzaramba recently told an Insurance Institute of Zimbabwe winter school that the insurance industry in Zimbabwe and Africa had reached a turning point.

“By embracing digital transformation, insurance companies can improve efficiency, reduce costs and provide better customer experience,” he said.

“Prioritising customer experience can lead to increased customer loyalty and retention, while personalising customer experience can help companies stand out from their competitors.

“Implementing digitisation can be done through the use of mobile apps, online portals and automation; and prioritising customer experience can lead to increased customer loyalty and retention.”

Dzaramba said it was crucial for insurance companies to keep up with the ever-evolving technological landscape and embrace digital transformation to remain competitive.

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