Harnessing Technology to Narrow the Insurance Protection Gap

Mohamed Khalifa, Vice Chairman, Misr
‘The take-up of microinsurance in Egypt is still very low.
This is not primarily because of the cost of insurance
for low-income segments of the population. The more
important reasons include a general lack of awareness
and, even if there is interest in buying cover, the need to
go via physical distribution channels.’
‘Talking about Egypt, the regulatory preconditions for
online sales are in place. Electronic sales and signatures
have been approved recently. The potential for digital
distribution is huge, as most people are keen to avoid
the hassle of using physical distribution platforms (traffic
jams, waiting times, etc.). Insurance penetration in Egypt
could increase by up to 30 per cent if the digital channel
is more widely used.’
‘From a frontier market point of view, premium collection
and claims management are two particularly important
links of the value chain that would benefit from
digitisation. It would help address major challenges such
as the misuse of funds and insurance fraud.’
Nikos Kotalakidis, Industry Leader Financial Services
(Germany, Austria, Switzerland), Google
‘What we observe in insurance against the benchmark
of other industries is not only a “protection gap” but an
equally significant “digitalisation” gap. Despite the data
intensity of insurance, the sector is still at a very early
stage of achieving digital preparedness.’
‘By 2025, I personally expect to see a large-scale
innovation within the B2C insurance market, driven by
insurers who increasingly put the topic of “digitalisation”
on top of their executive agenda as well as by new players,
including insurtech start-ups and technology players, who
introduce or facilitate radically new approaches to core
elements of today’s insurance value chain such as product
design, distribution and claims management.’
Stewart Langdon, Partner, LeapFrog
‘One of the biggest impediments to a greater insurance
penetration in developing markets is the reliance by
traditional financial services operations on “bricks and
mortar” infrastructure. Digitally-enabled models based on
mobile technology overcome these obstacles by bringing
down the cost of distribution and by reaching the hitherto
unreachable. Bangladesh and Ghana are just two examples of
markets where we already have seen the benefits. BIMA, the
mobile insurer, has doubled per capita insurance penetration
rates in both of these countries in the space of a couple of
years.’
‘In emerging markets, underwriting is often a challenge
because of the absence of formal credit histories, for example.
This means we must often call on non-traditional data: so data
derived from using mobile phones and social networks can
effectively address this issue and help improve insurability.’
‘Digitisation in insurance impacts all elements of the value
chain. We should be developing genuinely comprehensive
digital strategies, with the overarching goal of improving
customer centricity and meeting the expectations of
increasingly savvy and sophisticated policyholders.’
Richard Leftley, CEO, MicroEnsure
‘Traditional insurers tend to try and impose their existing
complex products on consumers in low-income markets. They
usually fail in doing so, ignoring the need to provide frictionless
enrolment, educational services and swift claims settlement.’
‘In low-income countries, non-insurers are the biggest
contributors to higher levels of insurance penetration. Take
mobile operators as an example. Some of them simply attach
insurance services to their selling proposition in order to foster
client loyalty. By doing so, millions of people learn about and
experience the concept of insurance for the very first time.’
‘Regulators should refrain from adopting a prescriptive
approach. Markets are more effective and efficient when
it comes to innovating. Having said this, regulators have
an important role to play in ensuring clarity, fairness and
transparency which matter greatly in microinsurance,
too, as opposed to solvency, which tends to be a
marginal issue.’
Henrik Naujoks, Partner & Director Financial Services
EMEA, Bain & Company
‘Digitisation goes hand in hand with unprecedented levels
of connectivity amongst people. For insurers, this presents
both challenges and opportunities. On the one hand, the
emergence of new players with superior access to customers
conjures up the risk of disintermediation. On the other, today’s
extent of connectivity allows insurers to offer more than
simple protection products. Based on their existing customer
relationships and pools of data, insurers can capture the
opportunities offered by entirely new ecosystems, for example
Harnessing Technology to Narrow the Insurance Protection Gap
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