In more developed societies, insurance remains a requisite part of living costs for individuals. It is so normalized that insurers in these parts have many products that can be covered, ranging from health, auto insurance to plant, and alien abduction insurance. (Yes, I said alien abduction insurance)
Contrastly, in emerging markets like Africa, which houses about 17% of the world’s population, insurance penetration is low, with less than 3% of the population having any form of standardized insurance.
This could very well change, with the use of Artificial Intelligence (AI) technology and an increased number of individuals using mobile devices and having internet connectivity, the Internet of Things (IoT) can catapult more people to access not just insurance, but better insurance products tailored to their needs.
AI-enabled IoT creates intelligent machines that imitate smart behaviour and supports criteria set for decision-making with little or no human interference. And while IoT deals with devices interacting using the internet, AI makes the devices learn from their data and experience.
For clearer context on how AI and IoT better insurance products can add maximum value and a better ROI to insurance, let’s look at how premiums are priced for an individual’s health insurance policy.
Traditionally, what insurers would do when onboarding a customer would be to give them a form to fill with a variety of questions like “Age? Weight? Allergies? Smoker/Non-smoker? Pre-existing illnesses?” and premiums would be priced based on the responses given (which may not be accurate), and individuals with similar responses to these questions would most likely be paying the same monthly or annual premium amounts.
On the other hand, with technology, the onboarding process can be made digital, first reducing the need for paper. It also can give more insight by accessing alternative data points than a simple questionnaire does.
So even when two individuals have similar responses to these questions e.g same age, same weight, non-smokers, with no allergies, other data points that can be derived from each individual’s mobile devices like “screen time; and the average number of steps a day” which give insight to risks associated with eyecare and physical care, helping insurers decide how much to charge each person as premium.
The use of technology helps insurers build quality products, and give better service to their customers, deepening the insurance penetration in sub-Saharan Africa and other emerging markets, and at Curacel, we are building these enabling platforms, software, and infrastructure to achieve these goals.