In conjunction with the shift to conduct most of the governmental transactions in Egypt Online after the launch of "Mezza", the first national electronic payment card, and with the trend of the technological revolution that the world is witnessing in converting all transactions into digital. The global insurance industry has evolved to cope with the era of "digital" and specialized companies have emerged that rely on electronic technologies and smartphone applications to meet customer needs and facilitate the purchase of insurance policies online.
Will the future of insurance in Egypt remain the same during the era of digital technology, and after the Coronavirus epidemic comes to an end?
What is Insurtech?
The term "Insurtech" is derived from the combination of two words "insurance" and "technology" which means relying on electronic technologies to improve the efficiency of the insurance industry and adding value to customers.
Fact: Insurtech made its debut through Friendsurance Company in Berlin in 2010.
The term "electronic insurance" began to appear in 2010 using artificial intelligence and data analysis to negotiate with brokers and assist insurance companies in making a mix of insurance policies and provide insurance coverage and related offer, negotiation and contracting as well as payment and document delivery and claims settlement processes via the Internet. You can search and compare different insurance policies and for instance, buy car insurance online, while in your home or office.
Insurance experts agree that the insurance companies ’adoption of technology in the insurance industry reduces costs, which would achieve financial savings ranging between 10-15% of the total expenses and general and administrative expenses incurred by companies annually, and this enhances public revenues and achieving good profits.
The difference between electronic and traditional insurance
A couple of years ago, it was exhausting for you to get insurance, because after scheduling a meeting with the agent, you may find out that he does not have a coverage option that suits your needs. Therefore, clients considered purchasing insurance a stressful experience because it required a lot of time and effort to:
- Dealing with sales agents who get paid and motivated through commissions, not for your interest as a customer.
- Navigation between piles of papers filled with confusing language that only professionals understand.
- Spending weeks (if not months) during the settlement process, only to know that your coverage is eventually denied.
But today you can do research, compare your options and buy travel or health insurance online from your phone or computer. With one click, change this online insurance for the better by:
- Making the buying and contracting process easier.
- Reducing the costs of insurance companies and policyholders.
- Speeding up the settlement process and exchanging compensation.
The implementation of the electronic claims solution dramatically demonstrated its importance, after Hurricane Irma stormed towards Florida in 2017, as the hurricane destroyed all parts of the island, destroying about 95% of the buildings. Florida insurer implemented a digital claims solution in just 5 days, as the company was able to process more than 3000 claims in just 3 days resulting in a faster solution and high levels of customer satisfaction.
The visual evidence, videos, and photos that were provided by the customer were good enough for the insurance company to authorize repairs without having to send a seizure device to check the property.
But with all these facilities, insurance technology companies remain in need of traditional insurance in underwriting, pricing of documents, setting their terms and exceptions, as well as managing catastrophic risks. Likewise, traditional insurance companies remain in need of insurance technology because they follow a sophisticated model and an easy-to-use and biased approach to the customer.
The advantages of electronic insurance:
1- Provide more comfort and time
Online insurance makes it easy for individuals and companies to quickly access insurance products and services.
2- Providing custom insurance policies
It provides customers with more fixed insurance options, as they can also customize insurance coverage to meet their unique needs.
3- Speed factor in compensation
You become a top priority for clients by taking their photos and sending them electronically for evaluation instead of making an appointment with a property inspector.
To learn more about the ease of insurance online, here are the steps to insure a car:
1) Through the phone you can report the accident and the initial notification of the loss
2) Through the insurance application of the insurance company, enter the necessary data
3) The application makes an initial assessment of the claim and submits it to the compensation manager
4) Completion of the accident evaluation process through a video call so that the evaluation is realistic from the company side
5) Through the application, the necessary compensation is settled
The worth of electronic insurance in the global market
Since the emergence of the term "Insurtech" in the insurance field in 2010, investments have grown very quickly, with $ 140 million annually invested in 2011, and increased to $ 2.7 billion in 2015, as the most successful electronic insurance projects exceeded the range of investment capital in financing. The average investment per company increased fivefold, from $ 5 million in 2011 to $ 22 million in 2015.
Investments nearly doubled from 2017 to 2018 globally, reaching $ 3.1 billion, with 138 deals concluded during that year.
In 2019, global investment in the online insurance industry was $ 6.37 billion, indicating 63% annual funding growth. Moreover, we have seen a 90% increase in the number of investment rounds over $ 40 million. All this means that the sector is beginning to mature, and soon startups will turn into leading companies.
Geographically, 57% of insurance technology deals from 2012 to 2016 went to startups based in the U.S. Germany, the United Kingdom, and China all experienced 4% to 8% of online insurance deals during that period.
Experts: The global "e-insurance" market is expected to grow by 41% annually between 2019 and 2023
The future of electronic insurance in Egypt
The Egyptian insurance market was able to enter the technology insurance sector through a set of steps, procedures, and legislation issued by the Egyptian Financial Supervisory Authority in 2016.
As the insurance technology revolution forced insurance companies in Egypt to intensify their competitive efforts in terms of customer service and the trend towards digital solutions as one of the most important ways to attract the insurance client, where the current challenge is to ensure that electronic insurance is attractive to consumers. This means offering customized products, rather than one size that fits all.
All indicators say that there are huge opportunities in the field of technology that has not yet been exploited by Egyptian and Arab insurance companies, although full mechanization of insurance companies will take a compulsory path in the next stage, especially after the global crisis to confront the Corona pandemic, which gave the green light to companies in all areas to move towards digital transformation.
Therefore, "Brokerage" took advantage of technology to become one of the first companies in Egypt that accompanied the technology revolution to improve the quality of the service provided to clients of insurance companies and facilitate all insurance services for individuals and companies online. Believing in its role as an insurance partner for its clients, it is working to launch all insurance services through its website and mobile applications soon.