The role of technology in a changing South African insurance market

The South African insurance industry is undergoing a serious makeover. Several insurers are investing heavily in changing their business models to reflect the new South Africa. According to Catherine Stagg-Macey, senior analyst at financial services technology consultancy firm Celent, this new landscape requires technology to move beyond policy administration systems and support innovative distribution and premium collection including mobile phone technology, voucher card, flexible billing options, improved product design, and management. Indeed, it is now clear that much of the microinsurance business sold will have to have a supporting IT infrastructure that has a different cost base to the existing monolithic systems. In order to do this, Ms Stagg-Macey argues, most insurers in South Africa will have to overcome legacy technology issues to support the changes in their business priorities

Since 1999, South Africa has experienced a long period of economic expansion, with an average growth in the annual GDP of 4% (according to Statistics South Africa). The country’s well-thought-of financial services sector was prevented from investing in the dubious assets that have caused headaches across the world. As such, the institutional issues plaguing Western countries are not a factor. However, the country will not be immune to the spreading global recession.