In consideration of the current economic situation in Nigeria, experts in the insurance industry have stressed the need for underwriting firms to examine risks, consolidate gains and invest in new technologies.

These, they claimed, would make them remain competitive in the market.

The industry experts, who spoke to The Guardian at the weekend, suggested that in 2024, insurance operators would need to automate claims, drive higher customer engagement as well as increase workforce and agents with artificial intelligence (AI) capabilities.

This, they said, will be fueled by new real-time data streams to make better, more informed underwriting and pricing decisions for the market.

Speaking specifically on the development, the Group Chief Executive Officer, Consolidated Hallmark Holdings Plc; Eddie Efekoha, expressed confidence in the market reconfiguration last year, stressing the importance of increasing digital channels to boost wider distribution of products and services.

Efekoha said in the New Year, there are expectations of higher adoption of technology. He said insurers are attempting to be tech-enabled, mastering data and its many sources to quickly evaluate and price risk, as well as serve customers when they need to purchase insurance.

“As they’ve seen in other industries, this is possible with a flexible technological base and strategic IT function. But most organisations still have a long way to go to be truly tech-enabled, as opposed to just digital,” he stated.

Looking forward, some other players in the sector also predicted that with the current efforts by the Central Bank towards stabilisation of interest rates, organisations are expected to transition from a passive acquisition approach to a more strategic one.

According to the Chief Executive Officer of FSL Insurance Brokers Limited, Alfred Daudu, this year, the insurance industry is expecting economic activities to grow, so that the sector will also grow.

He urged underwriting firms to initiate more lucrative products that could address Nigerians in their areas of need rather than duplicating existing products and do more on industry awareness.

“In 2024, there’s going to be a continued emphasis on digital transformation with a focus on automating processes, enhancing customer experience, and improving operational efficiency,” he said.

Already, the latest report by Globaldata about the insurance industry this year, predicted that Nigeria’s insurance market is expected to achieve a Compound Annual Growth Rate (CAGR) of more than 10 per cent between 2023-2027.

GlobalData Limited provides business information reports and services. The firm also offers research reports, news, forecasts, bespoke data analysis, market analysis, contract and industry information, and consulting services.

This is coming even as the National Insurance Commission (NAICOM), towards the end of 2023, formulated a seven-point agenda aimed at a transformation agenda in the sector.
The commission said it’s relying on its 10-year strategic roadmap for the insurance sector as well as a guidance note for the insurance of government assets and liabilities.

The Commissioner for Insurance, Sunday Thomas, said over the next decade (2024-2033), the insurance industry would seek to continue its transformation journey along the following seven strategic thrusts to achieve the corresponding goals.

According to him, the agenda includes transforming the regulatory environment to sustain the industry growth transition to a risk-based capital model, promoting insurance awareness and adoption, broadening insurance product offerings, and improving the effectiveness of distribution channels.

Others are; Enhancing digitalisation of the insurance industry, deepening the industry’s talent pool and capabilities and supporting Nigeria’s economic transformation and sustainability agenda.

Thomas stressed that NAICOM under his leadership had remained resilient and focused on implementing initiatives that would foster the development of the Nigerian insurance industry and align its fortune with that of the nation as Africa’s largest economy.

He said the initiative had increased the commission’s distress management and market restructuring.

He pointed out others as the implementation of Project E-Regulation through an operationalised Business Process Management Solution and NAICOM Portal.

“The BPMS is currently being used to process applications from insurance institutions while the Portal remains the focal point for the generation of unique policy identification numbers for all policies as well as a repository for statistical data including verification of insurance policies issued in Nigeria. Implementation of an actuarial capacity development program for the Nigerian insurance industry,” he explained.

Thomas added: “Under the drive by President Bola Tinubu towards a thriving economy, the insurance sector must be strengthened to play its role in realising this laudable national objective.

“NAICOM is very mindful of our collective responsibility to ensure that insurance institutions prosper; for it is in that prosperity that lies our attainment of our regulatory objectives of safeguarding insurance.”

All these plans offer significant hope for the future given also that in contrast to the slowdown in other industries resulting from economic uncertainty and other macroeconomic factors, the insurance deals market remained active in the second half of 2023.

Insurance carriers remain attractive targets in rising interest rate environments because they’re self-leveraged by nature, which reduces the impact of the rising debt costs that are hampering deal activity in other sectors.

Latest KPMG’s CEO Outlook for the industry landscape in the new year, revealed that over half of the insurance CEOs (55 per cent) are likely to pursue acquisitions that will significantly impact their organisations, showing that insurance companies are recognising the value of M&A as a tool to achieve their strategic goals.

The insurance sector is poised for transformation with the integration of Generative AI. Business leaders anticipate that AI can revolutionise daily operations by enabling their professionals to enhance communication with policyholders, streamline claims processing, and reduce fraudulent activities within the market.