The Next Generation Customer: Kenya Insurance Survey Report
Insurance is a unique product. It is bought based on a promise and as it is something you cannot see or touch, it is hard to convey its true value. Customer care and execution therefore is not just at the moment of truth – when it comes to a claim – it is at the stage of product design, pricing and underwriting. Looking at the customer, all in all I consider some positive trends in the sector have been revealed in the survey. There is a maturity in underwriting risk and conduct risk but gaps remain in driving lifestyle insurance and leveraging on technology to maximise delivery.
Turning our attentions to the future, given the ever changing insurance landscape, the opportunity is on for insurers to disrupt the way they manage their customers. The winners are the insurers who invest and believe in taking customer care to the next level and creating the next big thing for their customer.
Unique dynamics are playing out in the East African insurance sector
Greater awareness of insurance and greater demand for products are driving changes; from mergers, consolidations and new entrants; alongside proposed new regulations. This is underpinned by changing distribution channels – how insurance is sold, driving greater financial inclusion. Insurer’s reputations are now on the line. Reputation is the biggest asset and takes the longest to build but in today’s instant world, the fastest to go. The regulations are designed to enhance the sustainability of the sector through greater protection for the customer.
As more people access insurance, so insurers are servicing larger customer bases in new ways with new mind-sets and customer care is the new battlefield. The reality is every customer – a new customer, a loyal customer, from the village or the town – should be treated the same; that is fairly with a consistent outcome each and every time. This is application of conduct risk principles which is a new concept in East Africa.
Without customers there is no business and the newest challenge for any East African insurer is how to increasingly look after their customer to get this consistent and fair delivery. Insurance is a product you cannot see, touch or feel. What the consumer buys is peace of mind and protection in the event there is a claim. So in many ways they are buying a service they do not want to use but need to have. That is not to say each and every claim should be paid. The key is managing a claim quickly, fairly and transparently to ensure the right decision is made. Not all claims are covered under the policy and not all are valid and we can play a key role in this delivery through capacity building risk frameworks and integrating technology and analytics. Any insurer who does not embrace customer care is in difficulty. It is a way that insurers can differentiate themselves and if everyone in the organisation, from the receptionist to the CEO give 1% extra they will all reap the rewards.
Customer care has several facets:
You do not get a second chance to make a first impression!
It is therefore visual. An attractive broker or insurer’s office will create a warm impression; well dressed and friendly staff will keep that impression going; a handshake, a smile and above all timely delivery- do not keep the customer waiting.
It is also technical – insurers cannot bamboozle customers with small print and jargon – less is more when it comes to the products. So customer care is about breadth, knowledge and geography – insurers must understand their policies, be able to explain this simply and be able to know the unique emotional and cultural sensitivities. Making an insurance claim is stressful so there has to be a balancing of empathy and the right outcome- this is what makes up the customer experience.
It is a culture. It should be the number one strategic priority of any CEO and the whole company should be built around the customer. This runs from product design, service, and claims. It covers everything from policy wording, call scripts, letters, complaints and litigation. The culture of customer care should be automatic and unconscious.
Insurance in Kenya
Kenya represents East Africa’s best developed insurance market and the regions financial focal point. It is the market leader in the region with 3% insurance penetration and a highly competitive market comprising of 51 companies. In 2015/16 the insurance industry had gross premiums of $1.75bn with General insurance business forming the bulk of it. Kenya’s insurance regulatory system is also the most mature in the region e.g. Risk Based Supervision and a framework that is being replicated in other regional countries. In the recent past the country has major regulatory changes, we have seen major changes in IFRS insurance, FSA and conduct risks and solvency II.
The above is an excerpt from the Kenya Insurance Survey Report. Get a free download here
About David Okwara
Africa, Africa brief, Africa challenges, Africa opportunities, African countries, African insurance, challenges for insurance industry, Ethiopia, Foreign Direct Investment, insurance in Africa, insurance industry, Kenya, KPMG, KPMG Africa, long-term insurance industry, sub-Saharan Africa, Trade Mark East Africa