South Africa’s Insurance Sector Sets Global Benchmark in Generative AI Innovation

A new McKinsey & Company report, released at the African CEO Forum in Abidjan, Côte d’Ivoire, highlights that Africa could unlock up to $103 billion in economic value annually through the full-scale deployment of generative artificial intelligence (GenAI). And among the trailblazers? South Africa’s insurance sector.

Globally, GenAI already contributes an estimated $2.6 trillion to $4.4 trillion to the economy each year. But in Africa, its potential is still largely untapped — although progress is accelerating, especially in insurance.

“South Africa is pursuing wider and at-scale applications of GenAI,” McKinsey partner and report co-author Mayowa Kuyoro noted. “Emerging innovations range from voice bots in claims functions to hyper-personalised customer engagement campaigns.”

GenAI Revolution: Why Insurance Is in the Lead

The report singles out South Africa’s insurance sector as a global reference point for GenAI implementation, ahead of many developed markets. Local insurers are integrating GenAI into core operations — including customer service, underwriting, claims processing, and financial advisory.

One standout example: a South African life insurer that’s combining GenAI and behavioural science to support agents and advisers with personalised client content. This strategy enhances customer engagement and enables cross-selling while maintaining compliance and human oversight.

Insurers are also using GenAI to create gamified financial education tools and to automate underwriting for even the most complex cases — all while improving customer satisfaction and reducing operational costs.

$3 Billion Opportunity for African Insurers

According to McKinsey, GenAI could unlock $2.1 billion to $3.2 billion for African insurers alone. This includes improvements across the entire insurance value chain — from lead generation to claims fulfilment.

More than 40% of African institutions have begun experimenting or implementing GenAI solutions, the report says. South Africa leads, but Ghana, Kenya, Morocco, and Nigeria are quickly following suit.

What’s Holding Africa Back?

Despite the enthusiasm, there are still hurdles. Limited digital infrastructure, regulatory uncertainty, lack of AI-skilled talent, and data quality issues remain significant barriers.

However, McKinsey stresses that with the right strategic investments — particularly in infrastructure, talent development, and ecosystem partnerships — Africa can leapfrog traditional tech pathways just as it did with mobile banking.

“Success isn’t just about deploying technology,” Kuyoro added. “It’s about leadership, strategy and ensuring user adoption. This is a once-in-a-generation opportunity.”

Africa’s Moment to Lead

The message is clear: Africa has the talent and ambition to lead in the AI revolution, and South Africa’s insurance sector is showing how it’s done. With thoughtful innovation and investment, GenAI could be the catalyst for a new era of economic transformation across the continent.

{Source: Mail & Guardian}

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