FNB Enters The Short-Term Insurance Market
Three years after entering the long-term insurance industry, FNB are now all set to offer short-term insurance as well.
Published: Tuesday, April 24th 2018
FirstRand, the parent company of First National Bank, has been awarded a short term insurance licence by the Financial Services Board. The licence will give FNB the ability to underwrite short and long-term insurance to both businesses and retail customers, making them a fully-fledged insurer.
FirstRand had already acquired a long-term insurance license back in March 2015.
“We are now well positioned to sustainably scale our insurance pillar through a philosophy of simplified complexity, great innovation and superior convenience,” said FNB CEO, Jacques Celliers.
"Central to the success of our insurance business will be our ability to significantly increase efficiency by leveraging the FNB banking infrastructure and channels.”
FNB will also make use of new digital technologies to simplify the claims process for customers. Included is what the company calls a Robo-Claims Process – which FNB has built with new-age AI techniques in order to ensure quick pay-outs.
The bank has also vowed to give clients the ability to claim or track claims from any of its banking channels, including the FNB app.
With FNB’s huge public standing, it puts them in the position to deliver a unique and special process. FNB doesn’t need to do a lot of above-the-line marketing. They already know who the customers are. The company’s Life Insurance CEO, Lee Bromfield says:
“It’s going to feel to most of our competitors like a stealth operation, because they won’t necessarily see it, but quite quickly we’ll be eating into that market.”
FNB Up For The Challenge
Lee Bromfield says that the bank's long-term strategy is to ‘build the lowest cost insurance company in the market through our ability to interact with customers at a significantly lower cost than competitors’.
FNB will seek to gain substantial market share in the overall insurance industry. The bank’s innovative approach may be the huge competitive advantage it needs.
Speaking with Moneyweb, Bromfield went on to say that FNB welcome’s competition in the industry.
“But if you look at the industry now and you look at the existing players, most of the players out there have very limited insight in terms of who the customers are, what their customers are doing and what their potential customers are doing.”
Most people only interact with their short-term insurers when the time comes to put in a claim. So, there’s very little information throwback.
FNB has a massive database and have the luxury of possessing an intense amount of insight and knowledge of their clients. The company aims to put that knowledge to good use.
Another occurrence in short-term insurance that FNB will aim to fix is that there are many single-channel players. This means that a client could either go through a broker or a call centre, and Bromfield stresses that these means of communication offer little in terms of customer experience.
“I think what we are trying to do is really get to a space where we can offer people one-click insurance, to know so much about them that they can literally get insurance in the shortest possible time and still get a fantastic offer.”
FNB is still keeping a lot of information under wraps, but are looking at delivering a release to customers later this year.