#BizTrends2025: Enhanced digital enablement – the future of long-term insurance in South Africa

Source: Supplied. Anton Keet, head of Risk Service at 1Life Insurance.

In fact, the recent KPMG Insurance survey indicates that the sector witnessed double-digit growth when it came to profitability, with an increase from R27.3bn in 2022 to R37.4bn in 2023.

While we have a lot of work to do to ensure we remain relevant and continue to demonstrate the critical need for long-term cover, there is no doubt that the next year will see similar results, if not better, if we continue to apply the lessons learnt over the past few years to the coming one.

As an industry, we have learnt to pivot quickly around changing market conditions, and diversify our business models to dynamic market demands and client expectations to ensure we can continue servicing in these environments and provide value to stakeholders as we shift.

As we move into 2025, we are luckily moving in on the front foot with lower inflation, reduced interest rates, and economic recovery, which are looking a lot more promising. This bodes well for consumer confidence and makes retention and sales easier. However, we must remember that both potential and existing policyholders expect more from us as insurers, so the theme for 2025 in our sector will be enhanced digital enablement.

For years, we have been focused on AI adoption, Robotic Process Automation, and the like. They remain fundamental in driving consumer experience within our sector. However, the year ahead will need us to focus on some of the basics and ensure that we are creating further avenues and opportunities for consumers to access products and services, while driving value add to consumers where they need it most.

Digital channel growth and building trust

While the market is improving, consumers still face financial pressures, making it essential for businesses to optimise their sales mix. This includes focusing on digitally enabled, personalised services and products, delivered with speed and efficiency.

Leveraging innovative technologies can drive channel growth, helping businesses expand their reach and improve customer engagement. Ultimately, these strategies can help businesses increase market share even amid ongoing economic challenges.

However, while growing channels, we must know that trust plays a vital role in buying long-term insurance such as life insurance, online. So, while we build this enhanced digital framework within the sales and claims environment, we must demonstrate compliance and provide consumers with reasons to trust that our channels are reliable and safe, and offer suitable cover options without physical advice.

Personalisation and underwriting simplicity

In 2024, we saw the enormous impact of hyper-personalisation within the insurance sector, which has been a critical driver of volume improvements over time, and 2025 will be no different.

Digital engagements that create even further personalisation will be a key determining factor – other than premium pricing – when choosing which insurer to go with. It is also a key retention opportunity, where knowing your customer, their needs and changes and finding a place within these is business critical.

We need to make underwriting more accessible and straightforward over the next year. By implementing digital enhancements, we can simplify the process and avoid losing business to competitors, making processes easier and providing quicker routes to market.

The insurance industry is poised for significant opportunity as we move into 2025.

As insurers, we must enhance our businesses from a technological perspective while also focusing on the fundamentals of what matters to consumers. It’s essential to understand how we can optimise our offerings to meet consumers' needs effectively and to ensure that we prioritise building trust in the consumer experience.