For businesses across South Africa, customer centricity revolves around achieving client trust, loyalty, and satisfaction. However, in an age where customer expectations are continuing to escalate, meeting their ever-growing demands requires ever more innovation. 

With the rapid rise of digital services in other sectors, consumers expect tailored, fast and enjoyable experiences. There is, therefore, growing pressure for South African insurance and reinsurance businesses to provide high-quality services that keep pace with not only their competitors but also learn and adopt practices outside of the industry too.

The digital drive in the insurance sector 

Claims management is one of the key areas where insurance customers are demanding more. Following the shift towards a digital economy driven by the pandemic, clients are now expecting more from their providers when they have an insurance claim. This includes faster and more personalised responses, timelier payouts, and greater expertise. 

One of the ways insurance firms are responding to this trend is through automated loss adjustment. A combination of advanced technologies including AI are being used by insurance businesses to provide services that are far quicker than ever before. With the impact of floods, earthquakes and droughts increasing in South Africa, climate risk is one of the areas where loss adjustment automation has been used to a greater extent, minimising disruption for the customer. 

Faster payouts 

For example, some insurers are using drones to gather data on the damage caused by natural disasters as quickly as possible. AI is then used to provide real-time analysis, helping insurers rapidly confirm the scale of the damage, resulting in faster payouts to clients who have been impacted. In particular, parametric insurance is one of the insurance products that uses AI to automatically trigger payouts based on predefined climate-related parameters. As a result, if a parameter is met during a natural disaster, which may include a set amount of rainfall or several days with drought, the payout can be with the customer almost instantly. 

The use of parametric insurance has proven highly effective in maximising the protection of customers affected by these events. 

For example, the April 2022 KwaZulu-Natal floods, were one of the costliest natural disasters on record in South Africa, with 34 billion ZAR ($1.8 billion) in insured losses and 67 billion ZAR ($3.6 billion) in economic losses. In many cases, parametric solutions were used to ensure that funds were moved into the hands of those who had suffered losses from the floods in a matter of days, used by customers to accelerate recovery.

Improved accuracy 

Loss adjustment automation also provides customers with enhanced accuracy and fairness, reducing any human error or bias customers may have faced without it. AI can be used to analyse an extensive range of data points for claim evaluations, including historical data, the market value and specific details about the damage. The system’s ability to evaluate Big Data provides consistency in evaluations, ensuring that all customers are treated equally regardless of who handles their claims. 

This has been used effectively in South Africa not only when it comes to climate risk but in a variety of different areas. One of the most notable examples has been the use of automated systems during the pandemic to deal with the surge in claims related to hospitalisations and medical treatments. AI was used in many instances to analyse data including historical records, treatment plans and billing information to verify the claims, maximising accuracy for the customer and reducing the risk of mistakes. 

Loss adjustment automation is, therefore, playing a vital role in helping the South African insurance sector maximise customer centricity, ensuring that the consumer is provided with faster and more accurate payouts to their claims. As customer expectations continue to increase further, insurance businesses will need to keep up with other sectors and effectively use technology to meet these demands.

You can read the original article on the FA News website