Innovate or die, says Kaddunabbi

Alhaj Ibrahim Lubega Kaddunabbi, the chief executive officer of Insurance Regulatory Authority of Uganda. 

What you need to know:

Insurers are moving away from old legacy systems to tech-driven products to cater for the growing needs of customers. In an interview with Alhaj Ibrahim Lubega Kaddunabbi, the chief executive officer of Insurance Regulatory Authority of Uganda explains the trends shaping product innovations in the industry to Prosper Magazine’s Lydia Namono Wesonga.

1. What new realities must insurers embrace to exceed customer expectations, reduce operational costs and create value in the new normal?

There is no doubt that technology is the answer to any player that wants to serve customers better, lower operational costs and create value in the new normal.

As the regulator, we are intentional about technology across the industry, especially following the lessons learnt from the Covid-19 outbreak.

Technology is increasingly facilitating innovation in the industry; On March 11, we held the 2022 Insurance Innovation Awards, which sought to among others serve as a catalyst for innovation in the industry by reviewing excellence and hence motivating them to innovate more. The fact that innovation is increasingly becoming critical to the long-term success of the insurance industry, effects to incentivise players to innovate are efforts for long-term sucess of the sector.

With innovation, companies can develop sustainable competitive advantage and better respond to external challenges, such as evolving consumer preferences, growing business complexity, shifting market dynamics, and the ever-expanding technological advancements. Innovation will thus enable industry players to develop solutions that speak to the consumers’ unique needs and deliver the same in a way that suits the client’s circumstances.

2. What new capabilities have insurers gained coming out of the Covid-19 crisis?

During the two rounds of total lockdown, insurance industry players had to think outside the box to develop ways of providing services to the public. This saw them innovate processes that would enable them engage customers remotely. It was also established that simplified products and streamlined experiences hold the key to success in the digital age. Simplified products are necessary to support digital business models built on high degrees of straight-through processing. Customers win when they can easily find, research and purchase insurance products but so do insurers. We have noticed that such frictionless and intuitive experiences are increasingly becoming the baseline for customer expectations.

While simplified products, integrated channels and good customer experiences have been a vision for the insurance industry’s future for some time, the Covid-19 pandemic brought that future fast forward.

3. How can leadership ensure that improved agility, rapid execution and openness to change remain in place?

The benefits already recorded will remain a key incentive for leaders to focus on leveraging on these gains. They will need to keep open to new ideas, allow disruptions and adapt to the changing circumstances. Leaders will need to develop strategies that speak to the dynamism introduced by the challenges, and of course the opportunities of the new normal.

4. What and who is driving new product innovation to cater to the hyper-personalisation needs of customers – InsurTech startups or traditional insurers?

It is by both traditional insurers and InsurTechs; the times we are operating in require that one either adapts and thrives/ expands or shies away from the trend and they stagnate or shrink.

As you may be aware, the Insurance Regulatory Authority developed and issued guidelines for Sandboxes to enable budding innovators test some of their innovative solutions before they can be rolled out into the market. Currently, we have two companies in the sandbox, and we are optimistic that more innovators will come on board.

5. What will an enhanced customer experience across all channels look like in the next phase of the transformation journey?

New digital technologies have caused a shift in customer expectations. Today’s consumers are constantly connected, using apps and aware of what they can do with technology.

This is forcing companies to change their business models and adapt to the new market reality as customers are increasingly rating companies on their digital customer experience first – digital first.

Digital first is not just about being reactive; it is about being proactive in the way insurers help their customers, who use a range of channels to seek out solutions and support.

Customers expect fast, seamless and convenient insurance services along the entire value chain, and insurers are increasingly positioning themselves to offer the same.

6. How can hyperautomation be utilised to improve new customer acquisition?

Though still at a nascent stage in Uganda, hyperautomation is expected to slowly but steadily gain momentum over the coming few years as it is emerging as the go-to solution for players that want to increase efficiency and effectiveness through reducing manual processes.

Despite being a very important aspect in insurance, customer acquisition in insurance industry is still done manually. It involves collecting key documents, feeding them into a centralised system, verifying them and undertaking risk assessment. This is a lengthy and time-consuming process.

With hyperautomation, however, chatbots can welcome new customers and answer their questions any time.  The Application Programming Interface (API), on the other hand, facilitates communication between the applications in the workflow and smoothens the customer onboarding process.

7. How are insurers gaining insights (360-degree view on business, customer and operations) beyond the application of traditional analytics?

Unlike before, Big Data analytics has become a business imperative which in addition to providing solutions to insurance companies business challenges, is inspiring new ways to transform processes and other aspects of the insurance industry.

By allowing real-time monitoring and visualisation, big data is fundamentally changing the relationship of insurers and the insured as it allows insurance companies to use customer data to study their behaviour and innovate appropriate insurance solutions that are tailored to individual customer needs. This is because platforms built on data analytics have enabled insurers to get a 360-degree view of their customers and provide actionable insights based on previous insured customer data.

8. What is preventing some insurers from innovating and how can it be solved?

All insurers are innovating in one way or another. The difference is the speed of innovation and adaption to new trends. There is no two-way to innovation and insurers have no choice but to innovate. It is either you innovate or die.

As a regulator, we shall continue creating an environment that supports innovation for all.