South Africa’s value-added services market is currently a leader in terms of product innovation. The rapid pace at which technology is evolving is having a significant effect on how providers of assistance services are taking on the South African market.
Having spent the past 30 years of my career in the financial services, insurance and assistance services sectors, I can honestly say that the past 10 years have seen the industry evolve faster than ever before. In fact, the way that value-added services were delivered 10 years ago would no longer be relevant in the current competitive marketplace in South Africa. Digitalisation of the industry means that players in our sector have become heavily dependent on mobile and online platforms to maintain their edge.
It seems to be less challenging to gain client traction for these new technologies in South Africa than it is for our counterparts in Europe, despite of the fact that they are actively pushing to revolutionise their industries.
Market size plays a major role here. The market penetration of insurance and value-added services is significantly smaller here than in Europe, and it is also generally a younger client base in South Africa. In my experience, I have seen several instances where the introduction of new technology, in the form of apps and more efficient online portals, has achieved moderate success in the European market because the majority of the client base still prefers to use call centres to handle claims and policy related queries. Introducing the same changes in our market, with its rapidly growing millennial component, yields significantly different results.
This allows the value-added services market to both work more efficiently and to more freely explore technology-based solutions.
Value-added services are a vital component in driving the South African insurance industry forward. At their core, value adds need to make insurance products more accessible to policyholders. We have to enable clients to access their policies as and when it suits them, simplify the claims process and ensure that the policyholder is assisted by the relevant required expertise – be it competent roadside assistance, the right car repair professional or most qualified plumber available. High quality and effective value added services are the factors that can complement the overall market penetration of insurance in this country.
However, this also means that value-added service providers in South Africa are under pressure to evolve. The fact is that you can only compete in this market if you are better able to reach and service clients, and become as cost- and time efficient as possible within your own organisation.
We are working closely with our parent company in France, which has a lot of cutting-edge developments in various sectors, to adapt solutions for South Africa’s automotive, home, medical and travel insurance markets.
Having said all of this, there is still a lot of room to grow and change value-added services across the board. In the automotive industry, we have already seen the importance of fully integrating value-added services into insurance products in the form of roadside assistance.
I believe there is still a lot that we can do to integrate value-added service offerings into other lines of insurance, such as identity theft and personal cybersecurity, guaranteed courtesy vehicle in cases of mechanical breakdown and concierge services, to provide a more comprehensive offering to our customers.
By Jacques Preyser, Chief Executive Officer of Europ Assistance South Africa