A model regulator of a secure and developed insurance industry

DIGITAL ADOPTION; THE VIABLE GROWTH LEVER FOR BUSINESSES, ECONOMY

The outbreak of the COVID-19 pandemic has pushed businesses and organisations to roll out digitisation plans much earlier than most of them had anticipated.

Technology has over the past two years, been deployed to facilitate remote work and digital access to services as businesses sought to protect employees and serve customers who were facing mobility restrictions.

This points to the fact that digital adoption has become an inevitable and the only viable option for any business or organisation to survive, grow and thrive in today’s unpredictable environment.

With its ability to expedite numerous processes to increase efficiency, technology has positioned itself as a key enabler of survival and growth of businesses, irrespective of size.

While Uganda’s financial sector has in the past been mocked of lagging behind in technology use, it is increasingly making great strides. FinTech and InsurTech are becoming popular with new innovative ideas by financial sector regulators.

We have seen businesses in the recent past re-model service provision and are increasingly speeding up the roll out of digital agendas. They are putting in place systems that enhance their agility and make them more secure, connected and digitally enabled to ensure a seamless customer experience, create new business models and revenue streams.

We are also beginning to see a number of players innovate products to give themselves a competitive edge in the market.

Businesses that have embraced digital use are not only viewing it as a mere automation of processes but an avenue for opening up new ways of doing business through innovation.

We are increasingly seeing insurance licensed players focus on providing insurance risk solutions as opposed to providing insurance services as it has been.

Investment in Artificial Intelligence and Machine learning, which have a great potential to make virtually every process in the business value chain more efficient and streamlined, is a must. This requires companies to maximumly utilize their data goldmine.

Challenging the status quo

To further challenge the status quo, however, we should focus on distribution, brand/product differentiation and evolving pricing befitting today.

Increasing consumer awareness of business practices, especially for insurers by shifting from a “deny claims at all costs” to a more service-oriented model, and winning customers through leveraging price and discounts.

Businesses are also providing more distribution channels, particularly internet and e-commerce.

While ground-breaking digital products are yet to be fully unlocked, Uganda is on course to embrace the use of full technology in all business.

We know that businesses that will offer their customers a seamless IT experience are the only ones assured of survival to the next generation.  Thus, FinTech, InsurTech, RegTech, PropTech, FemTech and LegalTech, among others, remain a big driver for many businesses world over.

Technology will also unlock companies’ deeper understanding of risk assessment and the potential for businesses to gain a better view of their finances and better assess their financial risks.

Going forward, more innovative products are expected on the market as financial players continue to re-imagine product development and enhance service provision.

Imagine a world where insurance products had the capability to advise that certain risks are outside the scope of coverage such as avoiding certain routes based on weather data or getting your car serviced based on data collected from car telematics – communication technology for the automobile industry based on information flow to and from vehicles via wireless networks. What about a world where one pays based on the kilometres they drive, where the premium is adjusted based on driving behaviour fed through real-time interaction with your car or phone.

Also, think about a world where potential hazards, like car crash ahead or warnings of obstacles on the road are identified and warned prior to driving there; these could be some of the value propositions that companies can position themselves to deliver.

Ultimate customer experience

Assuming that this is the real world of businesses for the future consumer, user experience will be paramount.

Thus, there is need to adopt a 360-degree approach in order to gain greater knowledge of consumer behaviour, empowering the offering of timely and relevant coverage based on individual needs. This will support a safer and more content lifestyle.

The benefits notwithstanding, it is important to note that technological adoption has amplified the fraud threat as fraudsters increasingly devise means to extort data or gain access to systems.  Thus, financial institutions need to sensitise their staff and customers to be aware of the increased risks and follow protocols to avoid unwittingly falling foul to a cyber trap.

Businesses need to identify areas of unacceptable risk and ring-fence them, monitor the usage of non-approved technology and reiterate company policy and/or any contractual requirements, and focus their detection tactics on identifying situations that are likely to be intentional or malicious.

Alhaj Kaddunabbi Ibrahim Lubega

Chief Executive Officer

Insurance Regulatory Authority of Uganda