- COVID-19 pandemic expedites digitisation in insurance sector
- Insurers note impact of digital transformation in banking
Various industry leaders and experts in the banking and insurance sector have pointed out that the COVID-19 pandemic has accelerated adoption and use of digitalisation within the sector.
Speaking at a leadership seminar hosted by Absa Bank Botswana Limited recently, high-level industry leaders and experts unpacked the important role of technology in enhancing the local insurance sector during and after COVID-19. “As a financial institution, we are cognizant of the role that we play and the responsibility that we have to contribute to the sustainable development and growth of the communities in which we operate,” said Tebogo Giddie, Acting Corporate Director, Absa Bank Botswana Limited.
“As a responsible corporate citizen, we take this role seriously and it is through forums such as this that we are able to exchange purposeful ideas and knowledge. We appreciate the role that technology continues to play. Moreover, we recognise the rapid transformation that has taken place in banking, and we consider the insurance sector not too far off, particularly with lessons learnt from the COVID-19.”
Delivering a presentation at the seminar, Head of Data Management at the Non-Bank Financial Regulatory Authority (NBFIRA), Monkgogi Patrick Rampha, said there was an increase in funeral and medical aid claims as well as an increase in policy cancellations due to job losses and salary cuts caused by the COVID -19 pandemic. The pandemic also caused disruption in the flow of new business opportunities and a decrease in the use of face-to-face channels.
While digital adoption is still at its infancy in the insurance industry in Botswana, Rampha said technology is here to stay and that the COVID-19 pandemic has indeed accelerated the digitalisation drive. He called for collaboration among all stakeholders and evolution of regulation and supervision for the right balance to protect policyholders and allow for innovation.
“There is a need for the review of legislation to allow for technology adoption and consideration of cyber security issues,” Rampha noted. He stated that technological disruptions in the sector included implementation of Financial Technology (Fintech) and Regulatory Technology (Regtech) to improve customer experience and regulatory compliance respectively. NBFIRA has also introduced sandboxes for testing technology and use of Artificial Intelligence.
Giving an overview of digitisation of the insurance sector in Africa, Kenneth Makenna, who is the Head of Non-Bank Financial Institutions: Rest of Afrrica · Absa Group, said the region’s large untapped insurance markets require innovative solutions. He emphasised that digital transformation can be the solution to the challenges of improving penetration rate, reducing management costs, and disintermediation by non-insurers and targeted fraud.
“The digitisation of the insurance industry in Africa is taking place across the entire value chain and the technologies that are now readily available to insurers offer an opportunity to reshape their operations, providing greater efficiency and reducing costs. The greater efficiency offered by this shift may constitute a major opportunity for an enhanced insurance market,” Makenna said. The seminar sought to demonstrate the importance of market collaborations, hence Absa brought leading minds together from various sectors across insurance and financial technology.