‘Tech tools as solution to drive insurance policy uptake in 2020’

Worried by the poor insurance penetration in the country, stakeholders in the industry are demanding that greater investment be made in the acquisition and deployment of contemporary technology to address the crisis.

In the last three decades, insurance penetration in Nigeria has remained at an abysmal one per cent, owing to a number of factors, among which is the apathy by Nigerians to buy policies.

At various stakeholders’ meetings held across the country from the beginning of the year to date, speakers have bemoaned the failure of operators and stakeholders to effectively deploy technological tools to boost patronage of insurance products by the public.

Speaking in Lagos at the 2019 Mid-Year Workshop of the Lagos Area Committee of brokers and other stakeholders in the industry in collaboration with global tech giant, Microsoft Nigeria, the Executive Director, Business Development, First City Monument Bank, (FCMB), Bukola Smith, in a paper, “Deploying Technology to Drive Insurance Penetration,” hinged the problem of low insurance penetration in the country to the failure of professionals to leverage technology to grow the industry.

Smith, explained that insurance penetration in Nigeria is less than one percent, compared to South Africa, which has the highest penetration in Africa with about 16 per cent.

Discussing global trends in the insurance industry, she stated that basic technology is shaping the way insurance companies across the world do business as consumers are looking for companies that will make a shift from paper to digital and are able to enhance insurance purchase and management experience from start to finish.

“Customers want a seamless experience that enables them to complete transactions in a matter of minutes as opposed to the status quo. The traditional model where a broker or agent has to be encountered in person is fast becoming archaic,” she said.

With this, she charged brokers and stakeholders to embrace digital marketing, maximise the use of social media and artificial intelligence in their operations, adding that enormous opportunities abound in the Nigerian market and technology is a sure way to disrupt the status quo in the sector to allow improvement in the penetration level.

Similarly, President Muhammadu Buhari, while urging insurance companies to embrace technological innovations at the 2019 National Insurance Conference in Abuja, with a view to ensuring all Nigerians are insured, lamented that penetration in the country is below one per cent, a situation that presents vast avenues for underwriters to deepen insurance penetration faster, thus increasing financial inclusion.

Represented by the Permanent Secretary, Federal Ministry of Finance, Mahmud Isa Dutse, he stated that the apt utilisation of digital technology would provide operators the platform to deliver quality services to their clients as well as ensure that claims payment processes and procedures are faster, efficient and seamless.

“The command of digital innovations, ranging from artificial intelligence, aerial and digital imagery, online sales technologies, machine learning, Internet of Things (IoT), advanced analytics, virtual reality, to mention few, in the provision of products and services are endlessly disrupting the operations of the business environment, especially the financial institutional sectors where insurance is a sub-sector.

“The benefits of employing digital technologies in driving insurance penetration in Nigeria are unlimited. Artificial intelligence, for instance, when used can transform the archaic method involved in claims settlement thereby eliminating rigmaroles.

“Also, the usage of advanced analytics can help insurers to dynamically segment their clients and their needs, identify exceptions, adjust policy prices which in turn aids in optimizing new business strategies to identify new opportunities for business growth.

“With data sources like the Internet of Things, mobile-enabled insuretech apps and the likes, insurance premiums can become highly personalised to meet the various budgets of a heterogenous policyholders or intending ones.

“In Addition, the blockchain technology, a simple yet creative method of transmitting information from one point to another in a fully automated and safe way, avails insurance firms the avenue to have an easy and secure transfer of data across multiple organisations, without the loss of integrity.

“And this, in the long run, can help them conserve operational costs, fraud management, and reliable data availability.

“Indeed, technology is key for the insurance industry in Nigeria to keep the pace of handling business processes, provide better customer experience, as well as increasing sales, hence accentuating the penetration in Nigeria,” he said.

The former Commissioner for Insurance, Alhaji Mohammed Kari, also said that the need for radical reforms has been accentuated by the disruptive impact on the insurance industry through digital innovations.

Kari said insurers would only benefit from digital technology only if they embrace its potentials along the entire insurance value chain, including underwriting and claims management.

Thus, for insurance firms to remain relevant and become a critical contributor to the national economy, he said, they should consciously be proactive and organised so as to take advantage of the opportunities provided by these disruptive developments, while, at the same time, curbing their corresponding negative impacts.