FirstRand, the parent company of First National Bank (FNB), has been awarded a short-term insurance license. This comes during a time where the South African banking sector and insurance sectors have experienced cross-pollination, such as when Discovery entered the banking space.
This licencing by the Financial Services Board (FSB) comes three years after FNB acquired its long-term insurance licence.
What does this mean for FNB?
This enables FNB to be a complete insurer, with the ability to underwrite short and long-term insurance to businesses and retail customers.
According to FNB the goal is to gain significant market share in the overall insurance industry, through its innovative approach which gives FNB a competitive advantage.
Lee Bromfield, CEO of FNB Life, added, “Our long-term strategy is to build the lowest cost insurance company in the market. This we aim to achieve through our ability to interact with customers at a significantly lower cost than competitors. Customers will be retained through integration into the FNB ecosystem.
“Business insurance will play a pivotal role in our strategy. FNB Business has gained significant market share over the past few years on the back of relevant transactional and lending offerings. Most importantly FNB Business has strengthened customer relationships on the back of data driven insights. We want to complete the business offering with insurance. We see this working well in existing interactions with our business customers,” explained Bromfield.
Digital technology has become one of the central pillars of the insurance business, with the bank looking to take advantage of the following innovations:
- One-click sales processes; built-through superior rating and pricing models, taking advantage of existing FNB expertise and infrastructure as well as leading-edge telematics solutions built through the App.
- Robo-claims processes; built with new-age Artificial Intelligence techniques to ensure the fastest and best claims pay-outs in the market. Customers can now claim, as well as track claims and service policies from any channel of choice, including the App.
- Self-learning ratings models; which get more accurate while requiring less information from a customer continuously.
“With millions of active digital channel users, the bank aims to adopt an opti-banking channel strategy to service customers in the most optimal way, while actively learning and using the experience to develop a world class digital insurance experience,” concluded Bromfield.