Covid-19 pandemic has changed the world of business. The world of business as we know it will never be the same again. People are increasingly working from home, maintaining social distance, wearing masks, observing high levels of hygiene by washing hands with soap and water, among other measures.
For years, insurance firms have been reluctant on taking to digital platforms to amplify their products and service. Covid-19, however, leaves them no choice. It is time for them to choose to either shape in or shape out. The pandemic has presented a golden opportunity for insurance firms to realize the importance of going digital.
The local insurance industry has been struggling to reach the uninsured for years. However, new players are beginning to realize the benefit of integrating technology in their operations to increase efficiency and even more important reconnect with customers.
“Digital disruption has transformed many industries over the past decade. In the same way, the transport and logistics sector was disrupted by Uber, and hospitality by Airbnb, the world of insurance is being shaken up by insurtechs,” says Bente Krogmann, the co-founder, and CEO of mTek Services.
What Is mTek?
mTek is an innovative mobile application currently available on Google Playstore. The platform provides an entirely paperless end-to-end platform for the insurance industry.
The app allows customers to purchase insurance directly from the insurer and file for claims – all from the convenience of their phones.
mTek offers customers paperless insurance in motor, health, evacuation, and recent travel. “The app allows one to purchase insurance from a specific or underwriter of choice in real-time and claims can be settled faster. Instead of taking days or even weeks, using mTek takes only a few minutes,” says Bente.
The app has several functionalities as a client can compare policies from different underwriters and opt for the one they see fit. mTek’s developments are mirrored by industry research which suggests that up to 25 percent of small business insurance premiums could be digitally underwritten by the end of 2020, a proposition supported by demographic trends and changing small business owner behaviors.
Mobile penetration is making the uptake of digital services possible. As of 2018, FSD Africa indicated that about 5 in 10 people in sub-Saharan Africa had a mobile phone. In Nigeria, it was more than 70 percent and in Kenya almost 90 percent.
In some African countries, more people have access to a mobile phone than they have access to electricity. “Just like mobile money has deepened financial exclusion, we are making use of mobile apps to take insurance to the uninsured,” says Bente.
“When a country has less than 3 percent penetration of insurance as we do, it means there is a problem. The sector needs to adapt, make use of technology to communicate to clients in a language that they understand. Tech will help curb fraud, drive down costs, streamline internal processes and ultimately tailor products to the needs of specific income groups,” she notes.
According to Bente, the more there are less human interaction in the distribution of insurance, the more efficient the services will be, especially in reducing fraud.
“We cannot mitigate disasters when they happen, people need to understand that. And the only way we can cushion ourselves against eventualities is through insurance.”
Insurance is critical to the welfare plans of communities in developing markets like Kenya.
An eventuality, like illness, theft, or accident can leave families without money, food, or even shelter.
mTek’s ultimate goal was to simplify customer experiences and deliver solutions through a mobile app. The firm was launched in 2019 after a two-year development period.
“With the complexity of the local industry and integrating with different systems and partners, it is not easy to come up with a one fit all solutions. We also had to build a robust system with integrity, security, sustainability, and options to scale,” says the entrepreneur.
As the CEO, Bente accepts that the insurtech industry has its own challenges. For instance, there are no regulations that govern the digital insurance space, making it difficult for the industry to innovate. Attracting and retaining the right talent is also a nightmare. “There is also a lack of enough data to draw meaningful insights and use them for customized solutions,” she says.
Despite the challenges, she’s bullish about the insurtech industry and upbeat to make use of the platform (encourages other underwriters to use mTek) as a distribution channel.