September 18, 2020
The car insurance industry, like most others, has been impacted by the Covid-19 pandemic as well as other trends. Let’s explore the current state of the South African car insurance industry in 2020.
At this point in time, the full extent of the impact of the pandemic is yet to be felt. South African car insurance companies are said to have been closely following the Treating Customers Fairly principles as the country deals with the effects of the pandemic. Industry regulations may change in future should insurance companies mistreat their clients during these challenging times.
Insurers have co-ordinated their efforts to assist the government with minimising the spread of the Covid-19 coronavirus where possible.
The car insurance industry has been exposed to the financial impact of the pandemic, which includes growing capital requirements, settling more claims, and insurers’ assets. The insurance industry is more resilient today than it was before the 2008 financial crisis, thanks to specific measures put in place to sustain the industry’s financial stability and to protect the wellbeing of insurance customers.
Some believe that car insurance companies’ financial losses and claims during 2020 will direct future change in the industry. The global insurance body, the International Association of Insurance Supervisors (IAIS), is said to be assessing the impact of the pandemic on the global insurance sector.
Now more than ever, insurers should adapt to thrive in today’s volatile economy. South African insurers need to evolve to capture more of the mature portion of the insurance market as well as the previously uninsured motorists. Car insurance companies may need to find affordable and effective ways to integrate technology, skilled employees and their business models into their existing organisational structures to be successful in the future.
South Africa is not alone. Globally, the car insurance industry is looking for ways to be successful during unpredictable market conditions. Insurers across the world are seeking ways to evolve and stay relevant about their products and practices to cater to changing financial exposures. Consumers expect more from their insurers, and these companies need to meet their customers’ needs or they will lose them.
Incorporating new technologies into car insurance companies in South Africa now sees a noticeable shift towards finding better ways to understand their internal data through new analytics systems and by applying artificial intelligence. This process will allow for more streamline internal operations, better customer care and more tailored insurance products.
There is a challenging employment trend in the insurance industry. Employees with the needed digital skills are in short supply while the more senior, experienced staff continue to retire or move to other insurers.
Where there are challenges, there are opportunities as well. Now is the time for South African car insurance companies to push ahead and make the most of these uncertain times.
Car insurance companies such as PMD continue to provide their clients with affordable, innovative car insurance products while embracing technology and employing highly skilled employees to improve customer care and internal operations.