Uganda News

Creativity and innovation will keep you afloat

This – pandemic has challenged the fundamentals and hit us harder than was ever anticipated.

Covid-19 has become a household word and by this time most of us have lost someone. Covid 19 has disrupted all aspects of life, be it social or economic. The partial easing of the second lockdown that the country has just experienced is thought to bring some relief to both households and the economy. There is consensus that the economic performance of any nation is what defines it most. This – pandemic has challenged the fundamentals and hit us harder than was ever anticipated. Manufacturing, tourism, education, health and insurance among others have been hit in more or less equal proportions since they are interdependent.

To say the least, the pandemic shock has caused a sharp contraction of the economy to most probably its slowest pace in a decade or so. Household incomes have fallen as a result of firms closing and people losing jobs something which directly affects demand for even the most basic things like food.

In the case of the insurance industry, we have witnessed sharp declines especially in service-oriented insurances such as travel insurance, motor, comprehensive and workers’ compensation among others. The life segments have registered an increasing number of surrenders, lapses and cancellations. This is according to a research conducted by the Insurance Regulatory Authority of Uganda (IRA) on the impact of Covid on the Insurance Sector in August, 2020.

It suffices to note however that unlike insurance companies which have remained resilient in settling claims despite the constraints brought about by the pandemic, other sectors like education have been dampened badly to the extent that some of the proprietors are contemplating changing to other businesses.

No one seems to foresee the end of this pandemic as different and more dangerous variants keep emerging as already evidenced in some countries. We are left with no option but to learn how to economically stay afloat. Government has tried to do its part in managing emerging risks especially when it comes to the health of the population. Health is that very important aspect that we all need to be assured of, without it, we cannot do anything. It is one of those moments that we have witnessed more resources being channeled to the ministry of health and this is justified by the activities being carried out.

Again, we all need to survive and make progress economically. We must find ways of sailing through this pandemic without risking our lives or even forcing government to consider another lockdown. From the look of things, innovation and creativity seems to be but a safer avenue. Technologies have come and they are changing rapidly. One is safer embracing them than sitting back and relying on the traditional ways of doing business. Organizations ought to be creative enough and come up with sustainable innovations which will ensure that clients are served with minimal exposure to Covid-19 risks.

For the insurance industry we have steered it away from selling traditional insurance products and instead concentrate on coming up with risk solutions which address the prevailing challenges because that is what the public demands. The public wants value for their money and our conversations have now shifted to how we can deliver this value for money. There is already widespread consensus among insurance industry stakeholders that integrating emerging technologies into claims workflows, in particular, can help insurers improve efficiency and reduce claim management costs significantly. Indeed, according to a study on Digital disruption in insurance by McKinsey, automating claim processes can reduce related costs by as much as 30%, improve customer satisfaction by 10 to 15%, reduce adjustment expenses by up to 30%, and increase the accuracy of payments by 4%.

For the insurance companies, these innovations should not be done in isolation. There is need to involve insurance brokers and customers in a more proactive way and seek for partnerships with third parties who can lead the way while sharing customer insight. There is need for direct dialogue with customers because effective innovation means asking the right questions to the right people. By becoming trusted partners in the development process, it is possible to match the insurance solutions to the demands of the public whilst leveraging on emerging technologies.

I must reaffirm that as the Insurance Regulator, we are determined to support innovation efforts and indeed believe that Insurance Regulatory Sandbox guidelines shall improve efficiency, access to insurance services as well as create new opportunities to emerging technologies without compromising customer protection.

This is not exclusive to the insurance industry alone; it cuts across all sectors of the economy, education, manufacturing, agriculture and tourism among others. The question before all of us is how can we leverage digital transformation into effective solutions to our economic challenges? I strongly believe that now is the time for us to seize the opportunity ICTs are offering and turn today’s digital revolution into actual solutions to the demands and needs of our customers.

Government is planning and coming up with stimulus packages to be combined with structural measures that will sustainably increase productivity and build resilience to enhance livelihoods. But then as an individual what are you doing? You will need to be creative and innovative to mitigate the COVID-19 economic disruptions on your business for as long as you want to survive and stay afloat.

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