What Are The Insurance Trends of 2019?

A race to the finish line #bigdata #insurtech #aracetothefinishline

Elias Omondi, IRA, Associate Actuary


You know how there is an app for almost anything these days? Have you ever wished you could say the same thing about insurance packages? If the Insurtech 10: Trends for 2019, a KPMG survey released on the 5th of March this year is anything to go by, you just might. The report describes insurtech as “the means to transform insurance from an arcane policy-led industry into one that succeeds by placing the customer at the heart of everything it does.” This is a far cry from premiums as well, the most premium aspect of a cover.

While there is a list of trends, there are some that are immediately imminent and quite significant. Big data is King and stands out as the foundation upon which transformation in the insurance industry will be built. In the past data was about who, where and when, now it is about why and when. The challenge with this is one of trust. Consumers don’t trust organisations thanks to data breaches. This kind of data is collected through yet another trend that is becoming a part of our daily lives and that is wearable tech. Responsible for collecting personal data, it serves the purpose of clueing in insurers on consumer behaviour.

Take an example in auto-insurance. The employee who drives from Syokimau before sunrise and after sunset to get to work in Westlands versus the employee who lives in Kilimani pay the same premiums. But why not customise it? A drive from Syokimau carries more risk which would raise the premium against the latter. Insurtech would review this on a case by case basis. Subsequently, the insurer would need to look at the behavioural traits of the individual and ultimately, the benefit must go to the customer. The auto-insurance industry will in the next decade find themselves grappling with self-driven cars.

Big data will also affect underwriters and actuaries who will have access to data that will certainly shift how they do business. With the nature of insights big data will bring to the table, these careers will have to rejig themselves in order to stay relevant. It is not simply these two careers that will be affected. With the emergence of technology, employees will need to skill up and insurers will need to attract digital talent.

Next to big data, the greatest shift would have to be the digitisation of the consumer. No one has been a bigger success at this that China’s Zhong An. Founded less than a decade ago in 2013, it is an online-only insurance company that has so far attracted 460 billion users and written more than 5.8 billion policies. Talk about smart data.

Kivuiti Musili, Chief Risk Officer with Liberty Kenya added, “Are insurance companies prepared for the future? What is the competitive advantage that an insurer offers? Do you put your clients first and drive towards profits from a risk perspective?” There must be non-traditional ways to engage the market, especially when it comes to millennials. Their smartphones are a source of data picking up, once again, on behavioural data. It designs a situation where insurance does not only cover you when you are at risk.

What can the regulator do to drive those changes? Elias Omondi, Associate Actuary, IRA, mentions that tech can be used “To drive compliance and certain behaviours. That is the innovator’s dilemma. They do not want to start because they might be copied.” He then explained an interesting and unique aspect IRA possesses which is to not just regulate and supervise, but they have also included marketing development, itself a new phenomenon even abroad. Uganda is drawing inspiration from this.

It is no coincidence that Knight Frank’s Wealth Report released on the 4th of March this year has found climate change to be the leading cause of concern amongst Ultra-High Net-Worth Individuals (UHNWI). It, along with philanthropy and investing more in start ups, have captured their attention. That alone creates an opportunity for insurance. In Kenya for instance, farmers cannot plan as a result of unpredictable weather, which in turn affects food security. So far, insurers cannot cover entrepreneurs or farmers.

In conclusion, Kivuiti, says, “There was a time we used to hear about Black Swan events. Now you wake up and there is a Black Swan incident every day.” With big data comes the Data Protection Act 2019. Insurers collect very sensitive family data. But how is it being used? Is there consent? Is the data stored locally? Might an insurer need to engage with lawyers? Where does cloud computing fit? Anastasia Kamande, Associate Director, KPMG points out that, “Regulation protects the consumer so as an insurance company, you have to disclose why you want to, and will use this data. There have been instances where auditing becomes a data dump of everything in the company. I should not be able to see that information. Give me the data but anonymise it. That can be put in place even without cloud.”


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  1. Big data is definitely a huge trend in the industry, it has huge potential, but considering the maturity level of most of the operators in the Kenyan market, investing in big data without first implementing a data governance framework presents an enormous risk.


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