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Insurtech trends that will shape the insurance industry in 2019 and beyond came under the spotlight in Bahrain … and a new hard-hitting report on the sector reveals that there are opportunities galore to insure a disruptive and prosperous future.
The 2019 InsurByte conference held at the Gulf Hotel Bahrain Convention & Spa emphasised the importance of artificial intelligence (AI) within the Insurance industry, as highlighted in last week’s FinTech Focus.
The way forward is ‘InsurTech’ as the market for online insurance products and services continues to grow. More than 40 speakers and 300-plus delegates from various industries attended the conference discussing the challenges, trends and opportunities in the insurance space in Bahrain.
Khalid Saad, CEO, Bahrain FinTech Bay believes last week’s event will have a ‘profound impact’ on Bahrain. “We have a thriving insurance sector with various players, and the competition is fierce,” he explained. “However, the industry has a clear understanding that the path forward will keep changing as the technology changes.
“We look forward to collaborating with regional and international partners to create a positive shift.”
Bahrain FinTech Bay held InsurByte 2019 under the patronage of the Central Bank of Bahrain titled ‘Reimagining Insurance’ last Wednesday and Thursday. It was held in partnership with the Bahrain Institute of Banking & Finance, Tamkeen, the Bahrain Insurance Association and FinTech Consortium.
In addition, the Insurance Digitisation Report 2019 was launched during the opening session. The report was curated in collaboration with Roland Berger and BIA Insurance.
It has been described as ‘a useful guide moving forward’.
It reveals that Bahrain has over decades built an insurance industry that is now comprised of around 100 regulated entities.
“The industry is highly saturated with relatively low levels of differentiation and digitalisation,” said Khalid. “Compared to banking, the insurance industry continues to lag in terms of adopting the latest technologies and customer-centric approach.
“As InsurTech solutions emerges, it will dramatically transform the insurance industry. Such transformation will impact the value chain, enhance efficiencies and the customer experience, create new products, and redefine business models.
“With the rise of millennials and ever greater levels of technological advancement, adoption of and collaboration with InsurTechs will further support the industry to shift from a product-centric world to a customer-centric world. Additionally, this can support spreading further awareness of the insurance industry away from motor and health and increase the overall insurance penetration rate.
“Through this report, we aim to shed light on the current status of digitalisation in Bahrain’s insurance industry and explore how InsurTech can transform the industry and develop it further.”
The use of smartphones and other digital devices enables companies to directly reach their customers, and for customers to directly contact their insurers. With a local smartphone penetration rate of 158 per cent, the insurance market in Bahrain can leverage this opportunity and increase their digital channels of communication with their customers.
This method of enhancing customer experience is adopted by 50 per cent of players in the local insurance market and by having a widespread use of mobile and online applications. Hence, insurers can unlock new revenue streams by exposing their products and services to the uninsured population who have access to internet.
With emerging technologies, new business models are developed with customers being at the forefront of innovation.
One of the most popular business models on the rise is on-demand insurance. This model is specifically apparent in covering only those risks that arise within a certain event. Examples would be to activate travel insurance as soon as a flight is booked or to pay for car insurance based on its usage.
These advancements help insurers become more customer-focused and also focus on niches that were not covered before allowing for greater due diligence and risk profiling for policyholders.
And the next step will be digitally enabled operations and management. The application of AI and ‘big data’ within any organisation is highly useful in collecting data and analysing customer behaviour, the report points out. Instead of relying on historic generic data, insurers can collect real-time specific data on their customers.
Such data helps in providing insight on customers’ interests and sentiment. The submitted data can further assist insurers in tailoring their product offering and targetting to efficiently promote brand awareness and yield higher return on investment. The key areas of processing improvement could be found in risk profiling, claims processing, product offering, premium pricing, fraud detection, and underwriting. Thus, leading to an overall improvement in the delivery of insurance and management of its operations.
In conclusion, that given the low priority for digitalisation at the current stage of the insurance market, the report highlights that altered customer behaviour and expectations will drive the change toward digitalisation.
Customers will likely call for better digital experiences within the insurance market following their experience with alternative industries.
The report also highlights that the local insurance market can prospectively thrive and secure customer satisfaction with internal structural changes and the implementation of relevant modern technologies across various stages of an insurance transaction.
The aim of the report is to both gain an understanding of the existing state of digitalisation in Bahrain’s insurance market as well as the necessary steps that need to be implemented to accelerate the trend.
Moving forward, the intention behind the report is to provide a long-term reference for key stakeholders including local insurers, government entities and FinTechs to uncover the most suitable approach towards promoting digitalisation efforts in the market.
Some of the facts and figures presented have been extracted from the Central Bank of Bahrain’s database, although the analysis of the report does not reflect the views or position of the CBB and was conducted independently by Roland Berger and Bahrain FinTech Bay.
Simultaneously, the report’s primary source for data was a survey circulated among insurers in Bahrain.
The survey questions were broken down into key segments including organisational strategy and mind-set, customer journey and access to information and digitalisation efforts at different stages of operations, including quotation and claims management.
Following the distribution of the survey, the data was collected and analysed to provide further understanding on the current status of the market.
Additionally, the results were utilised to establish the path forward in regards to emerging growth drivers and opportunities. Recommendations were also built from the analysis to create a ‘crucial framework’ for varied stakeholders in the ecosystem to digest as a means of promoting the growth of digitalisation in the local insurance market.
For more details on the report, visit https://www.bahrainfintechbay.com/insurance-digitalization