Today’s insurance customer has become very complex owing to digital transformation — IT expert Mtumbuka

By Duncan Mlanjira

Information and technology expert, Matthews Mtumbuka says the modern insurance customer has become very complex, owing to the digital transformation and that they have several insurance options to choose from as the digital age has made the customer’s access to information so easy.

Mtumbuka said this when he presided as the guest of honour at this year’s Institute of Insurance in Malawi (IIM) annual Charter Dinner held at Mount Soche Hotel in Blantyre where he said the market is very competitive and the survival of firms in the industry is therefore no longer dependent on years of presence on the market, or on a larger market share. 

“Rather, survival will be dependent on the firm’s ability to quickly adapt change, innovation and technology and use the same to offer customers services that are beyond traditional,” he said.

“The question we should ask ourselves therefore is: What is it that we are offering that is innovative enough to distinguish us from our competitors that will compel the customer to choose us?

“As insurance companies which are slowly waking up to digital transformation, the current landscape is a huge opportunity. 

“With cutting edge technology and innovation, insurance firms stand a bigger chance of reaping first mover advantage benefits that can emanate from digital transformation inspired ideas. 

“As you can see this is a win-win scenario for both the firm and the customer. However, for this to be achieved, the changes have to be from across the board. 

“Government must provide a conducive environment and infrastructure that is enabling for digital transformation; firm owners, CEOs and proprietors must be open to change and be willing to take risks that allow for the digitization of our firms. 

“Our staff must also be those that understand that digital is the way to go and must therefore be the source of cutting edge and innovative ideas.”

Talking about staff and technology, Mtumbuka said there have been different schools of thought with some sections blaming technology of contributing to loss of employment mainly through artificial intelligence. 

“My thinking however, is that artificial intelligence can never replace those crucial human capabilities. 

“What we need now are well trained employees that are capable of developing more innovative ideas and to achieve this, our training institutions need to play a bigger role. 

“They need to understand the fast pace at which technology is moving and train our employees to adapt to the dynamic landscape. 

“Change must begin from the classroom. Our curricula must be those that gives the future insurer and edge and prepare them for future.”

He applauded the insurance industry that it has come a long way in creating awareness on the importance of insurance even though, according to the Reserve Bank of Malawi, the insurance penetration in the country is still low, at roughly 2 percent.

“The strides that players in the industry have managed to achieve over the years cannot be over looked.

“Without a doubt, insurance players are helping promote safety and wellbeing of Malawians in work places, on the roads of the country and also playing a very critical role in securing the future of the younger and older generation alike through pension funds, life insurance, Medical aid schemes just to mention a few.

“While insurance stakeholders continue to join hands to increase the mentioned penetration rate, insurance firms and training institution are being challenged to embrace a new way of doing business and the theme of tonight’s event — ‘Leading at the Edge, the Future of Ready Insurer’, fits perfectly into this challenge.”

He shared with IIM members the 10 commandments for success in the world — which he first shared with the University of Malawi graduands at their graduation ceremony of October 16, 2019 at the Great Hall in Zomba that:

1. Do not Procrastinate or over plan things. ACT immediately

2. Do not fear taking calculated risks

3. Never give up easily because as the Irish like to say: “good things are hard got.”

4. Avoid obvious wrong choices and decisions. But let the fear of wrong choices not make you indecisive. Be ready to make mistakes but avoid obvious ones.

5. Thou shall discover your personality.  Work hard to know your own strengths, weaknesses and personality for the bright kingdom on earth belongs to those that understand themselves first before they attempt to understand others.

6. Do not ‘Crone’ others. Be unique and special. Drive your own agenda not other people’s agenda.

7. Never compete with losers. You can only become a loser too. Rather associate yourself with friends who are focussed and achievers. Remember, you are the average of five people you usually hang out with. Hang out with achievers and experienced senior people.

8. Never stop reading and learning for we all know that knowledge is power. Knowledge is golden.

9. Avoid causing problems for yourself and for others. Rather be a solution provider. If you become the person that people regularly bring their problems to, then by default you are already successful, rich and powerful.

10. Thou shall not be lazy for he who does not work, should not eat. The world rewards those that work hard – most of the times.

In his remarks to Mtumbuka’s speech, president of the Insurance Association of Malawi Donbell Mandala — chief executive officer for NICO General — said the speech is quite clear that as a market they need to change or else they will be extinct or their services will become irrelevant in the market. 

“Evidence is out there where Uber has disrupted the market and has  taken over from the strong traditional tax business, the same is happening with the hotel industry as air b n b is becoming more popular. 

“There are more examples to reflect on and we really need to engage into gear 5 in our efforts for digital transformation.

“Socrates said that the secret of change is not to focus all your energy on the old, but in building the new. We should focus on changing on our deeds.

“Dr Mtumbuka gave us the famous quote that: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

“The question is are we adaptable to change? Dr Mtumbuka touched on the issue of insurance penetration which I am proud to confirm that this year as IAM , LIPAM AND IBAM with the support of RBM, we have put a budget of above K70 million that will allow us drive promotion and awareness of insurance.”

Mandala disclosed that the industry has a very strong team that is driving insurance promotion and awareness but there is the need to invest more in this initiative.

“As a market, maybe in future each company should dedicate 5% of their marketing budget towards insurance awareness as we are far away to from making significant impact.

“Dr Mtumbuka tackled our theme very well that it fits perfectly into this challenge and with his IT background, it reflects more of where our market needs to concentrate more as regards transformation — digital is the only way to go.

“It was painful though to hear that todays market is very competitive that survival of firms in the industry is therefore no longer dependent on years of presence on the market, or on a larger market share. 

“Dr Mtumbuka touched a raw nerve to most of us — we have been operating for more than 35 years in the market and for me the company I work for has a majority market share. I almost wanted to ask the MC to gag you so that you shouldn’t continue to embarrass us. However that’s the shocking reality of the current position of our business.”

He added that as a market they need to embrace transformation including digitization at formula one pace, as otherwise the telecommunication companies and other key financial industry players like banks will hi-jack the industry’s solutions.

“Some of the industry players as well need to reflect on adding value than just selling products. In my mind I have the broking houses or agents as the companies likely to face stiff challenge from this harbingers. 

“We anticipate more personal lines business in the next two to three years will be offered on digital platforms and clients will be able to buy directly from the insurers. 

“Motor Assessors roles are also under challenge as there are new apps that can give repair estimates based on the digital picture of the damaged vehicle.”

 Mandala applauded Mtumbuka for encouraging the industry to invest in cutting edge technology and innovation, that will offer a win-win scenario for both the firm and the customer as the modern customer is very complex and has high service demands. 

“International standard recommends investing around 5% of gross income into IT and hopefully as a market we will start to implement the same.

“Dr Mtumbuka has challenged us to use technology to assess the risk, that initiative is famously known as insure tech and I am glad that some players in the market are leading in that sphere but let all of us join the bandwagon immediately as it’s no longer a luxury but a necessity and in addition the benefits are very huge,” he said.