How e-channels spike underwriters’ N1.50 billion premium income

Despite huge financial investment by insurance operators on Information Communication Technology (ICT) to attract more premium income to their business operations, especially at a time of industry recapitalisation, only N1.50billion was generated through online transactions in 2018.

Data obtained from the Nigerian Insurers Association (NIA), shows that underwriters got N1.50billion from e-channels, which was 0.36 per cent of the N413.85billion gross premium income recorded in 2018.

The underwriters got N220.89billion from insurance brokers; insurance agents generated N107.83billion or 26.05 per cent; direct sales brought in N29.01 billion, 7.01 per cent; bancassurance yielded N30.37 billion, 7.34 per cent; and N24.25 billion, 5.86 per cent came from other distribution channels.

According to the Nigerian Communications Commission (NCC), there are over 122 million Internet users in Nigeria, with 33.13 per cent broadband penetration.

The NCC said the figure is projected to grow to 187.8 million Internet users in 2023, while Internet penetration is expected to hit 84.5 per cent.

Industry observers believe that this provides huge opportunities for insurers to sell their products as quickly as possible.

The National Bureau of Statistics (NBS), said E-payment channels in Nigeria for the first half (H1) of 2018 was N65.3trillion, compared to N49.4trillion in the same period in 2017.

NBS also put mobile payment transactions for H1 2018 at N739.6billion compared to N555.8billion and N612.7billion same period in 2017 and 2016, respectively.

It said POS transactions topped N1trillion for the half-year compared to N610billion and N676.7billion in the same periods in 2017 and 2016, respectively.

Internet web-enabled transactions came in at about N113.9billion in H1 2018 compared to N83billion and 106.2 billion same periods in 2017 and 2016, respectively.

Commenting, the Controller, Information Technology, Research & Statistics, NIA, Mrs Bola Omole, said weekend, there is a need for insurance operators to embark on awareness creation. She added that the low premium from e-channels may be as a result of the belief some people hold about electronic transactions, which make them buy products directly from the insurance companies.

One of the policyholders, who spoke to The Guardian over the weekend, said one of the challenges, why so many people are scared of online transactions, is a poor network in the banks.