The South African insurance market is highly competitive. There is a definite need for advice as the middle class continues to grow and more people learn about the importance of insurance.
Forces shaping the way in which insurance is distributed include multiple access points as well as new technology. It has become evident that while direct distribution channels may have worked in the past, the South African market has changes significantly and there are expectations for the insurance distribution channels to evolve accordingly.
Africa is seen as an emerging market opportunity. Online distribution is expected to grow in the country, particularly the distribution of motor, health and term life insurance products.
Insurance distribution channels in South Africa need to keep up with various changes within the industry. In addition, customer behaviour needs to be observed and understood to derive real insights that can shape attractive products and differentiated experiences. A common trend that has been identified is that insurance customers in South Africa are slower to adopt direct channels, preferring to speak to intermediaries. An increase in cyber crime has been ranked the number one concern by insurers in South Africa, which may explain the slow rate of change to be introduced to the industry.
In South Africa, citizens are concerned that the insurers are not making the best use of technology to develop distribution channels.
It cannot be disputed that digitalisation of various industries has had a big impact on insurance. SIM connections are making digital strategies a reality for insurers in Africa.
According to research firm Gartner, many insurers worldwide are looking to modernise their legacy core systems. This is with the main aim to provide a platform that is more flexible for distribution innovation.
There is a need for new thinking to challenge conventional assumptions about the way in which insurance is distributed.