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Sunday, June 1, 2008
Going for 60/40

Consumers and small businesses in South Africa are increasingly moving towards direct purchasing methods when it comes to buying short-term insurance. And it’s largely due to ongoing innovation and technological advancements introduced by direct insurers to enhance the customer experience. This is according to Thys van Niekerk, general manager of Dial Direct Insurance.

He says that around 30% of short-term insurance products sold in South Africa are now through online services or over the phone. One can expect the split between policies sold direct as against those written through intermediaries in this country to reach international norms, such as the UK’s 60/40 split.
The growth of direct insurance is gathering apace as consumers become increasingly open to alternative purchasing routes. Consumers nowadays are less reliant on face-to-face contact for advice and value the ease and convenience of assessing insurance options, and completing policy applications over the phone or on the internet, in their own time.
Internet adoption and usage in South Africa, although still lagging behind more developed countries, is definitely on a growth spurt. This has certainly helped spur-on direct insurance growth, as has mobile technology.
“Then of course, there is the commitment and focus of direct insurers to improve registration, applications and claims processing procedures. Whether it be online or over the phone, buying direct has never been faster, easier and more convenient. Dial Direct for instance, offers a call-back option so consumers can literally arrange insurance at the cost of an SMS,” says Van Niekerk.
Direct insurance companies are also becoming far more proficient in the marketing and selling of tailored solutions to specific needs. Consumers not only have the benefit and convenience of sourcing affordable short-term insurance without needing a broker, they can also shop around for a provider that offers solutions targeted to meet their requirements – and one that suits their lifestyle.
There has also been a concerted drive by direct insurers to improve consumer access to insurance information and advice so that consumers can make more informed decisions. This is an area where brokers have traditionally had one up on direct insurers.
“Some insurers, like Dial Direct for instance, have gone as far as to re-write its policy books in plain, simple, understandable language to ensure consumers are not baffled by the fine print and insurance jargon typically used in insurance policy handbooks and contracts.
“This increased clarity and transparency has not only been good for consumers, but for the industry as a whole,” he says. He points out that without this commitment to innovation, direct insurance would not have enjoyed such exponential growth.
Direct insurers have to be in tune with what consumers want and how to get it to them in the fastest, most efficient, and most user-friendly way possible. This requires constantly researching local and international trends and evolving in line with them.
“To stay ahead, direct insurers have to keep innovating. Dial Direct recognises this and is always looking for ways to streamline and improve the client experience,” says van Niekerk.
In August last year, Dial Direct launched an online facility which allowed policyholders to micro-manage their motor and household insurance portfolios online, in their own time, in real-time.
In just six months, close to 5 000 Dial Direct clients have registered for online policy management, with an average of two new registrations per hour.
 

Copyright © Insurance Times and Investments® Vol:21.5 1st June, 2008
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