OPINION: Serving a modern-day life insurance client

Kampala, Uganda | PATRICIA AKANKWATSA | For a population of 45 million people, only a total number of 388,966 (Exclusive of Health Insurance) life policies were taken up in 2021 as per the IRA report. This equates to only 0.86 policies which reflects the low penetration of life insurance in Uganda. Where is the divide? Do Ugandans appreciate well the importance of life insurance? Are providers of this service evolving to trends in the market that bridge customer expectations and product development?

Insurers continue to ponder on these questions and, in a bid to draw the insurable population, insurers have adapted and become more agile as we can see below.

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 and mobile applications.

Digitalization has improved transparency in the insurance industry. In addition, insurers are also using technology to simplify claim settlement procedures, making the entire process faster, hassle-free, and more efficient.

For sustainability, Life insurance companies continue to be challenged to re-think, re-boot, and where possible drop the heavily structured legacy processes in favour of modern technology as a way of reducing operational costs with an eye on long-term growth. A company that is oblivious to the current changes in the technology world will surely be left far behind the pack if not completely failing to reinvent and cease existence.

Personalization of Policies

In the not-so-distant past, life insurance policies were one-size-fits-all products. However, with changing times, life insurance companies are now offering customized policies that cater to the unique needs of different customers. Insurers can offer tailor-made policies based on the policyholder’s age, lifestyle, and health status.

The use of data analytics and artificial intelligence to gather information about policyholders’ lifestyles, health conditions, and other factors that can impact their life expectancy is pivotal. Personalized policies can offer better risk coverage at a lower premium, making them more attractive to policyholders.

Inclusion of Wellness Programs

Several 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, a healthier lifestyle for policyholders, leads to a better quality of life.

Use of Big Data Analytics

Apart from playing a central role in the personalization of policies as noted above, 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. Therefore, the continuous use of analytical tools and big data sources from operations and finance have helped organizations analyze the factors driving what customers say satisfies them and the actual customer behaviour that creates economic value.

Emphasis on Customer Experience

Insurance products are not fully differentiated. This means that superior customer service experience has become the key selling point and promise. In the past, insurers were more focused on selling policies rather than offering a good customer experience. Insurers are now investing in technology to offer a seamless and hassle-free experience to their customers. The current competitive landscape has forced insurers to view their customer journeys from an outside-to-inward perspective. The critical key touchpoints, like in the claims process are all properly captured and redefined to meet customer expectations.

Insurers are now using chatbots and other digital tools to offer 24/7 customer support. This has been achieved after realizing that customer experience companies are improving the customer journey through end-to-end experiences and not touch points for example sales & customer onboarding, claims submission & settlement and resolving of complaints. Insurers are also using social media platforms to gather insights into, the level of service, relevance of products and areas of improvement.

Shift towards ESG (Environmental, Social and Governance) Investing

One-way ESG investing has impacted the life insurance industry by influencing underwriting decisions. Life insurance companies are increasingly considering 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.

In conclusion, UAP Old Mutual Life Assurance has in the recent past embarked on several activities that are aimed at better serving the life insurance customer. These are but not limited to launching the AJUAA platform which collects customer feedback, themed financial wellness clinics that impact the public with basic financial management knowledge, personalized life insurance that caters for the customers’ individual needs in addition to digitizing the whole process of walking the customer journey from policy inception to maturity.

Therefore, due to the relentless efforts by insurers to adapt to an ever-changing environment, Ugandans have continued to search for safe alternative investments where customers can save money for retirement, guarantee the education of their children, and earn meaningful bonuses amidst ongoing economic recovery following the Covid 19 pandemic. We see an increasing demand for employee benefit covers because of the constantly evolving working environments with new technology, global competition, and changing customer needs and preferences. The customer of today and tomorrow will demand nothing less but superior service! They have options at their fingertips and are well-informed. Insurers are faced with only one choice – an agile and adaptive strategy for business growth. Anything less cannot guarantee continued survival.

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The Writer is the Head Of Marketing and Distribution at UAP Old Mutual Life Assurance.