The need to fully embrace modern technology in insurance business operation is every day starring on the faces of insurance operators. Loveth Azodo in this report captures the mood of the insurers towards digitalisation of their operations at their recent professionals’ forum held in Abeokuta, Ogun State.
The lingering problem of low insurance penetration in Nigeria has created the need for stakeholders in the insurance industry especially insurance service providers to retool and effect drastic change in their business operandi.
Indeed, insurers need to allow some level of disruption in their operational model by moving away from their traditional mode of operation to modern way driven by the use of technology. Not only has the industry need to embrace new technologies and practices to deepen their services penetration, they also need to address some of the challenges posed by COVID- 19.
Insurance penetration in Nigeria remains at less than 1%. In 2020 the penetration rate of the sector plunged into deep recession standing at 0.5 %.
Technology deficiency in the insurance sector has reportedly played a role in the low inclusion and penetration rate in the nation’s economy.
For instance, some policyholders lamented that whereas other sister subsectors in the financial services sector like banking and even pension,have fully aotomatec their operations, claims processes in Insurance Sector is still largely paper-based.
This obviously in time consuming and is responsible for much delay in claims settlement which policy holders continue to lament about. This has no doubt created the need for a full digitally-driven marke in Nigeria.
To close this gap, the National Insurance Commission (NAICOM) in September, this year launched its portal to ensure the digitalisation of all its operations.
According to the commission, the portal promises to enhance efficiency and effective service delivery.
Speaking at the 2021 Insurance Professionals’ Forum hosted by the Chartered Insurance Institute of Nigeria (CIIN) in Abeokuta, Ogun State, the Commissioner for Insurance, Mr Olorundare Sunday Thomas lamented on the technology deficiency in the insurance sectors.
Thomas at the forum which has the theme, Nigerian Insurance Industry in the Digital Age’, noted that the insurance industry is currently lagging behind and needs to reassess its business model, re-evaluate her strategy and make the digital agenda a high priority.
“If this is not done it will be difficult to deliver on customers’ expectations and new entrants, Insurtech Companies and leading digital competitors will take advantage of this weakness. It is time for Insurers to evolve and do the needful.
“Colleagues, my address has been designed to leave you with more questions that should trigger your quest, questions and contributions to the Paper Presenters”
As a Professional, will I still be relevant with the current level of knowledge when the Digital Age fully evolves and even metamorphoses into a new coming Age?
Expressing his fear for traditional processes, he opined that as an industry, if we fail to pay the price required to meet up with the demands of the Digital Age, what would be the consequence of a late catch-up strategy?
Without unpacking all the contents of the Big Box called Digital Age, there are contents yet to be explored such as Automation, Blockchain Technologies, Artificial Intelligence, Internet of Things, Big Data, and such like.
He said the only explorable option for the sector operators is to maximise their positioning in the digital age, insisting that waiting with their arms folded is not an option;
An Insurance Company, called “Root Insurance” in Columbus Ohio now uses AI, Cloud Computing, Machine Learning to enable everyone with smartphone get a motor rate based primarily on their driving behaviour, rather than relying on historically based demographic data to determine rates.
So, are we going to wait to do catch-ups with InsurTech Start-Ups before we disrupt our Models that suits the Digital Age”, the commissioner queried?
He told the operators that the Commission was desirous of a fully digitised industry especially now that the Covid-19 pandemic has accelerated the adoption and the use of digital technologies in the Nigerian Insurance sector.
“To this extent, On 1st September, 2021, the NAICOM Portal was successfully launched. In order to ensure effective and efficient utilisation of the Portal, the Commission directed all Operators to: Integrate, connect and upload five (5) years historical data of all policies issued from 1st January, 2016 to NAICOM Portal on or before 1st March, 2021.
He noted that Some of the insurance operators have embraced and implemented new technologies, upgraded their business model and strategy by creating new channels of distribution to make insurance products and services available and affordable.
“Few Insurers can now sell insurance policies through the USSD Code and the Mobile App thereby saving their customers the stress of walking down to their office premises to buy a policy while many others are yet to adopt digitalisation.
He however noted that some insurers were yet to lift the burden of excessive paper work in claims processes . Reacting to the use of bank cheque in settling claims, the Chairman of Nigerian Insurers Association (NIA), Ganiyu Musa, assured that using traditional methods to settle claims was gradually phasing out as the association was encouraging its members to embrace digitalisation as fast as possible to remain in business.
Proposing solutions to the low adoption of digitalisation in the insurance sector, an administrator, a business thinker and customer advocate currently involved in sharing advisory services on insurance and Risk management, Mr Ekerete Ola Gam-Ikon said that new trends and opportunities had created value chain challenge in the global development of insurance.
“We found ourselves in the digital world and there is nothing we can do about that, The best way to approach it is to see how we can merge the value chain of insurance into that of the internet world because with one’s device you can do a lot of things.”
“When you lodge in a hotel in America and ask for their internet facility once you log in all details of your device is automatically with them, we need to do insurance in that manner, when a customer gives you his phone number you would have captured everything about that person.”
“it is possible to know when a customer has an accident before he/she reports the incident ” he said. That is where we ought to be in terms of credibility.
According to him, the value chain challenge has created opportunities for the kind of things we have today for the digital insurance world.
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