Coined in 2003, High Earners, Not Rich Yet (HENRYs) are young, educated, and highly paid millennials who are close to accumulating significant wealth. As these individuals start nearing the peak of their careers, their spending habits also increase, particularly on high-end products and technologies. When it comes to insurance, these fast-paced individuals want convenience and immediate solutions for their needs.
With the integration of artificial intelligence (AI), the insurance industry is fast adapting to provide solutions to meet this need. According to McKinsey, AI could very well mimic the human mind when it comes to things like perception and solving problems, which could completely transform the insurance industry and the way that people buy insurance products.
According to Vera Nagtegaal, the Executive Head of online comparison website, Hippo.co.za, there has been a significant shift in the insurance industry from detecting and repairing damage to predicting and preventing risks.
“Technological innovation is set to improve the overall customer experience, lower costs, increase productivity and speed up the process of interaction between brokers, consumers, financial intermediaries, insurers and suppliers,” she says.
Nagtegaal explains that, over the last few years, AI has been integrated into everything from mobile devices, cars, watches and even household appliances. “The data from these devices will provide more information to insurance companies, which will allow them to understand their clients better, leading to customised pricing and instant settlement of claims.”
Minimal involvement is required for both customer and service provider.
“Smart devices tracking driving behaviour will enable tailor-made pricing for car insurance and you could pay less for medical aid if you lead a healthier lifestyle,” says Nagtegaal. “All client information is picked up by algorithms that create your risk profile, so buying insurance will be instantaneous.”
Claims could be settled in a matter of minutes, as user interface and digital claims adjusters will enable more efficient logging of claims and reduced processing times. Nagtegaal points out that fewer people will be involved in the process, which could decrease the risk of fraud in the industry.
With new technology emerging daily, the insurance industry is experiencing a continued shakeup. Insurance companies will have to stay abreast of the latest offerings and make sure they incorporate AI into their products.
“The key is to adapt and create new solutions, in order to remain relevant and provide the best possible products and services for the needs of more connected consumers,” Nagtegaal concludes.