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The advent of a digital world brings with it numerous pros and cons. While trying to navigate this new frontier within the insurance space, the industry must remain vigilant and keep the customer at the center at all times.
The Insurance Forum on The Digital Future kicked off in Johannesburg this month. The Forum will travel to different parts of the country before the year ends. The Johannesburg edition saw a call for greater collaboration and information sharing within the industry if the digital space is to be optimally utilised.
Cybercrime and fraud are still major concerns within the short-term insurance sector. This makes data sharing between insurance companies, brokers, and relevant stakeholders mandatory to curb and manage cyber risk and allay consumer fears.
While the digital space can yield numerous positives for the industry, insurance practitioners need to be well equipped to leverage this space to their advantage. Garth de Klerk from the Insurance Crime Bureau says criminals are also aware of the digital space and are using it to commit a number of insurance related crimes daily.
Some of these crimes include vehicle fraud where opportunistic and professional criminals claim from numerous insurers for damages on one vehicle. While the Bureau has mechanisms in place to combat such incidents, it relies heavily on the sharing of information between insurance companies and relevant stakeholders.
“Combating syndicates needs partnerships with insurance companies,” says DeKlerk. Though these partnerships are slowly growing, more are needed.
Data collection for insurance incidents is more difficult than data collection for life insurance. This is why this part of the insurance industry needs to firmly collaborate and intentionally share information.
“The industry needs to share data and information in order to stop fraud in its tracks, as it stands not enough is being shared so individuals can get away with numerous claims on one incident,” says DeKlerk.
He says insurers and consumers need to be aware of the fact that the use of digital devices, and advancements in the digital space with improvements such as smart cars, implanted medical devices, and smart homes, increases vulnerabilities. When it comes to cybercrime in work places or at home, the weakest link is always humans.
“As an industry we must come together to talk about the cybercrime of tomorrow, personalise it, make individuals understand its impact,” says DeKlerk, adding that on top of partnerships or collaboration, education in this sphere is also paramount.
Alexandra Schudel from Chubb agrees saying that risk starts with the individual. She says the onus is on individuals and businesses to protect their information from ease of access. Schudel however says there are opportunities for businesses within cyber risk, especially in the insurance space. Policies can be developed and redeveloped to cover both individuals and businesses from cyber risk. She stresses that cyber risk is not discriminatory -- any and everyone is at risk with data and connectivity forming the cornerstones of this type of risk.
“Not everyone is insured entirely for cyber risk because data is not an actual asset,” she says. “A policy that ring-fences the specific risks around cyber is needed.”
The digitalisation of industries in the buildup to the fourth industrial revolution is a minefield of opportunities and risks. It is in how various industries, and more specifically the insurance industry, utilize today’s platform for tomorrow’s gains that will set industries and companies apart in the future.