May 23, 2024

Fintech meets Insuretech - a match to elevate the customer experience

There’s no doubt that the fintech sector is one of Africa’s biggest technology success stories.  The continent has long been a leader in identifying innovative, technologically focused solutions to major financial problems. Small wonder then, that as of 2023 all but one of Africa’s unicorns (startups valued at more than US$1 billion) were fintechs.

While it may not have a fintech unicorn of its own, South Africa is no stranger to excellence in the sector. In August last year, three South African fintechs were named among the 200 best in the world. That should hardly be surprising. The country has always had a strong and innovative financial sector. Applying its existing acumen to new, technologically enabled products and services just makes sense. It is also worth noting that fintechs have enabled many millions of unbanked Africans (more than 350 million people accoss the continent are financially excluded) to access financial services they otherwise wouldn’t have been able to.

The fintech space is evolving rapidly too. Just as traditional banks have moved beyond savings, investment, and loan offerings, so has the fintech sector. The difference is that it’s doing so at an accelerated pace. There are few instances where this is more visible than in the evolution of Insurtech (or insurance-based technologies).

“By bringing some of the fundamental principles of fintech – including improved value and an enhanced customer experience to insurance, the sector is undergoing a fundamental transformation,” says Keletso Mpisane, Head of Bink by MiWay. “What was once a grudge purchase that people only interacted with when they needed it, has rapidly become an important part of their day-to-day lives.”

To a large degree, that is because this approach has significantly improved the insurance experience.

“Consumers see this most visibly through whatever insurance app they might use,” Mpisane says. “With your car insurance app, for example, you can claim instantly in the event of an accident, get roadside assistance when you need it, and even get discounts and rewards for good driving behaviour.”

“But there’s also a lot of technology behind the scenes that leads to a more valuable product and enhanced experience,” she adds. “Automated onboarding, for example, means that people get insured faster while the use of data analytics helps ensure that everyone pays a fair price on their premiums.”

This application of fintech principles to the insurance sector is no longer the preserve of plucky upstarts either. Large, well-established companies are embracing fintech and Insurtech as a subsidiary of it.

One local example of this is Sanlam. Founded in 1918, it recently launched a Sanlam Fintech division. The division has amassed a cluster of businesses, including Blink by MiWay, to take under its wing and help expand those businesses’ digitally led customer experiences. This partnership aims to incorporate financial guidance, rewards, non-intermediated product offerings, and seamless payment capabilities to deliver an integrated digital customer experience that customers expect.

Beyond that, it aims to fast-track financial access for all Africans. Insurance is a fundamentally important part of that. To understand how important it is, one needs to only look at the fact that as many as 70% of South African vehicles are uninsured, something which comes at a considerable cost to drivers and the broader economy.    

“For Blink by MiWay, being part of this cluster amplifies our position as a leader in digital insurance and shows off our commitment to innovation and transformation,” says Mpisane. “It’s a partnership that shows growth and willingness to adapt and brings about many advantages to customers including digital accessibility.”

One example of how being part of the cluster is already bearing fruit is Blink by MiWay recently launching a WhatsApp bot. Amongst other things, the bot launched in February 2024, helps clients get quick insurance quotes on WhatsApp.

“Fintech has empowered millions of Africans through savings, transactional, investment, and lending products,” says Mpisane. “We’re only at the very beginning of it having a similar effect on insurance. Make no mistake, the level of investment by the likes of Sanlam, in Insurtech and fintech, will produce significant positive benefits and inclusion for insurance companies and consumers alike in the future.”

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