‘Technology solutions will drive insurance penetration’
Worried by the poor insurance penetration in Nigeria, stakeholders in the industry are demanding that greater investment be made in the acquisition and deployment of contemporary technologies 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 Nigerians apathy to buying policies.
At various stakeholders’ meetings held across the country from the beginning of the year till date, speakers bemoaned the failure of operators and stakeholders to effectively deploy technological tools to boost patronage of insurance products.
This was the consensus at the 2019 Mid-Year Workshop of the Lagos Area Committee of brokers and other stakeholders, in collaboration with Microsoft Nigeria, in Lagos.
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 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 said 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 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 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, had decried the low access, thus providing vast opportunities for underwriters to deepen insurance penetration faster, thus increasing financial inclusion.
Represented by the Permanent Secretary, Federal Ministry of Finance, Mahmud Isa Dutse, he said: “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 optimising new business strategies to identify new opportunities for business growth.”
A former Commissioner for Insurance, Mohammed Kari, also said the need for radical reforms has been accentuated by the disruptive impact on the insurance industry through digital innovations.
Kari said insurers would benefit from digital technology only if they embraced its potential along the entire insurance value chain, including underwriting and claims management.