IconAccounting & Tax
IconAppraisers & Valuers
IconArbitration Services
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
  Subscribe To »

Insurance, Innovation and the Internet of Things






By Neil Pather, National Manager: Marketing, Commercial & Niche Lines
Lion of Africa Insurance Company Limited
Economic growth in South Africa was almost non-existent in 2016 and it was a tough year for the short-term insurance industry. With no growth opportunities, the sector saw churn more than anything else with the same business just shifting between insurers.
A business environment such as this generally pushes premiums lower. In an already price-sensitive market, it’s an easy win to gain market share, but at the expense of margin squeeze and a race to the bottom. Clearly, this cannot continue in the long run and risks damaging the short-term insurance industry. Worse, were this to endure for a lengthy period, the likely outcome would be further industry consolidation and less market competition.
On the political front, South Africa was exposed to policy uncertainty and two nail-biting rounds of credit rating pronouncements, which thankfully left South Africa’s sovereign credit ratings unchanged, although with a negative outlook. Just the tension and uncertainty in the lead-up to the announcements is enough to suppress the economy and temper performance.
The dearth of growth potential in the insurance sector has meant that innovators have been able to gain an edge. The creation of new products and new insurance solutions has led the path to new opportunities. For example, with very low penetration in the vehicle sector, insurers who devise products specific to the needs of the uninsured will be able to see growth.
And there is certainly plenty of opportunity beckoning here: in 2013, the Automobile Association estimated that a massive 65% of vehicles on the road did not have insurance and in 2015 an estimated 10 million vehicles in SA were uninsured. But the lack of insurance extends well beyond the vehicle sector. At whatever level one is operating, if one has assets and one risks losing them, they need protection. In fact, this is even more relevant at lower levels as the loss can have a far greater proportional impact than if one is at a higher level. Worse, people living on the edge of society are exposed to a far higher risk of loss from natural disasters such as fires and floods.
This legacy of low-insurance penetration offers significant potential to an industry under pressure, but critical for success will be the industry’s ability to adequately serve the so-called bottom of the pyramid cost effectively and efficiently.
While attempts to serve this market have been made in the past, distribution has proven to be a challenge. Technology will be able to assist, particularly with the rapid progress being made in this field. It is highly likely that a tech platform will be able to offer distribution to the uninsured while also enabling the products to meet their needs. Clearly the future will be mobile access as smart phone penetration rises in Africa – it is forecasted to reach 80% by 2020 – and data costs will come down.
Innovation will drive our future and, importantly, it can occur anywhere and anyhow. Some of the remarkable developments that we have witnessed recently involve the Internet of Things (IoT), billed as the fourth industrial revolution. IoT is the situation where sensors and chips are being embedded in many devices and objects. These devices are gaining the ability to communicate using the internet and this phenomenon can be utilised to manage them and protect them.
From an insurance perspective, we can see this technology as a way of managing risk, mitigating it and lowering the cost of insurance, to the ultimate benefit of the insured. Businesses and individuals can use the information generated to strengthen security and manage risk as well as manage change that comes with a dynamic environment. This will enable keener pricing and improved insurance products.
About Lion of Africa Insurance
Lion of Africa Insurance Company Limited is a South African non-life insurance company that was licensed by the Financial Services Board in terms of the Short- Term Insurance Act No 53 of 1998 on 23 August 1999.
The company is the first insurance company in South Africa to achieve a Level 1 Broad Based Black Economic Empowerment rating in terms of the BBBEE Act of 2003 and is a wholly owned subsidiary of The Lion of Africa Holdings Company (Proprietary) Limited, owned by Brimstone Investment Corporation Limited, a broad based black investment group listed on the JSE.
The company’s short-term activities are concentrated primarily in the commercial property and casualty markets. It also operates in the personal lines, marine and engineering segments.
Lion of Africa Insurance Company Limited is an authorised financial services provider (FSP 17511) in terms of the Financial Advisors and Intermediaries Act No 37 of 2002. For more info visit
Source: Cambial Communications
« Back to previous page Print this page » |

Breaking News »

The Implications Of Overloaded Vehicles On Your Insurance Policy

Overloading – it’s a common occurrence on our roads. If we don’t drive past an overloaded bus, taxi or truck, then we read about another horrific accident caused by one. Hundreds of passengers ...
Read More »


Supporting Brokers In Optimising The Claims Experience Of Their Clients.

TANSA is a team of dedicated professional Attorneys, Forensic accountants, Disaster Claims Experts and Insurance Specialists focused on Insurance Claims & Dispute Resolution. Their mission is to support ...
Read More »


Redefining the role of the broker in a digital age

Technology, data, cultural and behavioural change of the consumer is transforming the role of the broker – and the importance of advice – in South Africa’s intermediary insurance market. Soul ...
Read More »


Premium collections now available through Brolink

Brolink has entered the premium collection market. Says the company’s CEO, Howard John, “After a very successful pilot programme, and working through a number of legislative issues that ...
Read More »


More News »


Healthcare »


Investment »


Life »


Retirement »


From The Glossary »


Interim Dividend:

A dividend paid out at the end of the first six months of a financial year.
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2021. All Rights Reserved.