In the UK, the personal injury insurance industry continues to be beleaguered with the reputation for bogus claims driving up premium costs (reports state that 78 percent of all UK personal injury claims are for whiplash injury, compared to just three percent in France, for example), slow pay-out rates, and poor forecasting.
This reputation for poor value and lack of individual approach is also present in the corporate insurance world, with recent headlines stating that BT’s £40 billion pension scheme has established its own wholly-owned insurance company in order to access the insurance and reinsurance markets directly and “achieve the best value” for the pension scheme. The message left unsaid: the trustees couldn’t find an adequate offering already in the marketplace.
Turn your gaze to the insurance services of the fast-growing markets, which (despite having their own critics) continue to innovate when it comes to service and product provision. There is much we can learn; they highlight the importance of new technologies and an enabling regulatory structure. In Brazil, for example, insurers have created policies for older cars that provide smaller amounts of coverage along with a higher deductible. They also offer one month, third party liability automobile insurance plans that buyers can activate using their mobile phones. Closer to the Gong fold, East African client APA Apollo has launched an agricultural microinsurance scheme, Mifugo Maisha, which uses satellites to survey the availability of pasture for animal grazing, then predicts the number of animal fatalities and provides insurance to cover the potential losses.
This expectation for enabling, inclusive provision may come as a shock for foreign insurance firms looking to expand internationally and capitalize on the growing consumer base that is so attractive to the sector. Not to be left behind – the main players are on the march to the fast-growth economies already; Prudential has bought into Ghana and is looking at East Africa, other rumours abound. Let us not forget that it is local knowledge, expertise, and understanding how technology can be used to improve the everyday lives of the local consumers, which will give British and other global insurers an edge.
To read a case study on the work that Gong has undertaken for APA Apollo in East Africa, please click here.