INSURANCE

IT’S BECOMING
PERSONAL
Data and tech are transforming
insurance, allowing for greater
insight and personalisation,
reports Kate Ferreira

T
he insurance business is changing, partly out
of necessity and partly thanks to the ability of
technology to help create better products.
For the former, broad global trends –
such as ageing populations and climate
change – are already having a direct effect on insurers and
underwriters are looking to tech to combat the risks.
The technology itself is driving change. According to EY’s
2018 The Future of Insurance report, it means customers’
Avsharn Bachoo, needs are different. Ride-sharing apps and self-driving
chief technology cars mean young people won’t drive as much as their
officer of PPS. parents, for example. Technology can also help with age-old
problems for insurers: blockchain and artificial intelligence
(AI) are improving data security and reducing fraud.
“WE ARE PREPARED FOR POPI, TO ENSURE OUR CUSTOMERS’
GETTING TO KNOW YOU
Insurance is getting more personal, with customised
policies and risk profiles, rather than prices, based
according to demographic groups. Your life insurer already
knows your age, address, family medical history, and so
on, but increasingly they are incorporating behavioural
data – what food do you eat? How fast do you drive? – into
their pricing models. More data of this kind means more
accuracy for the insurer (which reduces risk from their side),
and the ability to reward “good” behavioural data in some
way, such as being offered lower premiums.
Avsharn Bachoo, chief technology officer of PPS – a
mutual financial services company – says PPS is in the
process of modernising its data and analytics capabilities.
The starting point was to get a single view of the
customer across their business, says Bachoo. Divisions

INFORMATION IS PROPERLY PROTECTED.” – AVSHARN BACHOO operating in silos and using different software created
multiple instances of the same person on their databases,
and this needed to be cleaned up.
“At this stage, the analytics platform focuses on
recommendations,” Bachoo explains. “It has the ability to
provide leads to upsell and cross-sell products to existing
PPS members.”
The next phase in PPS’ plan entails bringing in external
data, from sources like credit and data bureaus. “PPS,” he
says, “is trying to get more behavioural information about
existing and potential customers or members with a view
to targeting offers to people.” For example, offering an
investment product to a customer around the time they
FAST FACT usually receive their bonus pay.
Medical aid and
medical insurance are
two different products AN ETHICAL CONUNDRUM
regulated by different There is a strong commercial incentive for insurance providers (POPI) Act outlines stringent requirements for anyone who
acts. In South Africa, to have deep insight into customers or potential customers. collects, stores or processes personal data.
medical aid providers For example, if your medical insurance provider (not “We are prepared for POPI to ensure our customers’
(or medical schemes) medical aid) knows that you are pregnant based on your information is properly protected,” Bachoo says. “From an
are regulated under claims, they could flag you for a potential cross-sell with their analytics perspective, when we develop our analytical models,
the Medical Schemes investment division, offering, say, an education-focused member data is masked, so we focus more on clustering. For
Act of 1998, which savings policy. example, we won’t use one member’s information to predict
Images: iStockphoto and supplied

prohibits, for example, “A vast majority of Americans (91 per cent) ‘agree’ or an offer for another member directly.”
a medical aid provider ‘strongly agree’ that people have lost control over how For customers, tech can mean innovation in an industry
from selling two personal information is collected and used by all kinds of ripe for disruption, but personal customer data, and
different people the entities,” says Lee Rainie of the Pew Research Centre. Similar the personalisation this enables, is arguably the biggest
same cover package at research about South Africans simply doesn’t exist. “changemaker” that both start-ups and traditional insurers
different prices based Legislation like the Protection of Personal Information must prepare for. ■
on their risk profiles.

TECHNOLOGY SOLUTIONS & INNOVATIONS l 25