Why businesses can no longer ignore digital transformation

The advent of the Covid pandemic drastically shrunk customer inflows to insurance companies and their agency offices, justifying the immediate adoption of Internet-based delivery channels that support customer interaction and effecting of purchases via mobile payment platforms.

In 2020 through to part of 2021, as most Kenyans remained indoors—in line with State-imposed restrictions—underwriters partnered with digital platform providers to continue marketing their products as well as facilitate a seamless paperless process to initiate, effect and conclude the purchase of insurance policies.

Underwriters had no option but to adapt or perish. The need to go ‘tech’ has also been informed by a rising number of the tech-savvy working class.

According to the latest Communications Authority sector statistics report, as of last December, the number of active Internet/data subscriptions rose to 46.7 million compared to the 40.9 million recorded during the same period the previous year.

This reveals mobile data subscriptions continued to constitute over 99 per cent of the total data subscriptions, meaning every serious business must moot simplified messages about their products to talk to young workers.

Mobile phones have become banks and Sacco branches as well as ‘tellers’ that users access 24/7. We inquire about any product or service first from our mobile Internet portals. This means digital insurance platforms are the future of insurance.

Interestingly, insurance policies are usually preceded by bulky tiny font printed documents bearing conditions that customers must abide by before signing any contract.

This has been a major bane for the industry largely misunderstood by the general public. Most customers rely on agents to read the fine print leaving them with the simple function of appending their signatures on the agreements made on policy documents.

Such deals have made insurance products alien to Kenyans, making it difficult to drive penetration that now stands at 2.98 per cent.

 The situation has further been made worse by the lack of a transparent process for lodging insurance claims when an accident at home, on the road on the loss of an insured product since traditionally one was expected to visit an agent’s office to initiate the claims process. Local companies must adopt online platforms to generate traction with tech-savvy Kenyans.

Kenya has also scored a world-first leading to numerous multinationals sending emissaries to seek an understanding of how mobile payments work.

We pay for fuel, food, fares, and airtime and deposit money into bank accounts via mobile platforms. Insurance companies have also initiated mobile payments where motor insurance premium is paid via such platforms and insurance certificates are sent over the Internet for the holder to download and print. The platforms have opened a new avenue for the introduction of micro-insurance policies to farmers.

Operators like mTek allow clients to buy insurance directly, compare policies and file claims through their smart devices. Other underwriters such as APA and CIC avail crop and livestock insurance products via mobile telephony with no human-to-human interaction.

Mobile phones contain Know-Your-Customer capabilities that enable individuals to open micro-insurance accounts to register and pay low premiums for various policies.

While annual premiums are beyond the reach of many people, there is a need to moot monthly payments customers can subscribe to with digital platform providers playing a key intermediary role between customers and insurance companies.

mTek settles annual policies for customers who in turn make monthly payments for their policies. That is a major win for Kenyans who can now pay for a one-day insurance health cover for as low as Sh1,000  per month with more products now being marketed online by micro-insurance providers from a single portal that enables Kenyans to compare various policies before making payments.

Information about various products is also available with many insurance providers also maintaining customer e-desk to facilitate feedback round the clock. The future is digital, ignore it at your own peril.

— The writer is the Chief Executive Officer of mTek Services