Insurance Technology (Insurtech) companies are actively seeking new avenues for business growth within the industry, as advanced technology is predicted to bolster insurance services and cater to the needs of underserved Nigerians, ultimately driving the sector’s premium financial gains, which currently stand at ₦726.2 billion. The companies have displayed willingness to venture into unexplored areas that are not typically favoured by underwriting firms. They are considering options like providing highly personalized policies, offering social insurance, and utilizing data from Internet-connected devices to determine premium prices based on observed trends. Their aim is also to address the persistently low Insurance penetration rate of 0.5%, thereby boosting the sector’s over asset which stood at ₦2.33 trillion in the past 10 years.
For many years, the insurance industry in Nigeria has fallen behind in embracing contemporary technology to enhance services and maximize its potential contribution to the country’s Gross Domestic Product (GDP). Conversely, tech-adopting insurance firms are now steadily entering the market, revolutionizing underwriting, claims handling, and customer interaction. Insurtech enterprises leverage data analytics, Internet of Things (IoT) gadgets, and artificial intelligence to enhance risk evaluation, fostering customized insurance strategies that simplify claims processes, diminish fraud, and amplify transparency with underwriting firms.
Firms expand their coverage reach by leveraging technology.
In a briefing with the press, Toba Obaniyi, the General Manager of Turaco Nigeria and Turaco Inclusive Limited, highlighted the impact of Fintech on the banking industry compared to its relatively nascent influence on the insurance sector. Obaniyi stated that many underwriters and microinsurance intermediaries continue to rely on outdated and inefficient systems that cannot be harmonized with external collaborators. He claims that by leveraging technology, the Insurtech company effectively expands the reach of insurance coverage to the general public through innovative distribution networks, all while maintaining affordability.
He asserts that technology has the potential to significantly decrease the expenses associated with insurance management and customer service, thereby aiding in maintaining affordable and accessible premiums for the general public. Regarding future market expansion, he mentioned that prioritizing coverage is crucial for insurance providers catering to the mass market. He asserted that the low number of insured Nigerians does not indicate a lack of demand but rather highlights barriers related to accessibility and affordability. To explore the untapped market and broaden coverage, it is essential to revamp the design and distribution of insurance offerings.
It is crucial for firms to take charge and upholding integrity.
Responding to claims that payment has a probable impact on the operations of Insurtech, he stated that claims are handled directly, greatly influencing the level of trust customers place in insurance. He said gaining and maintaining customers’ trust is essential, particularly since many of them are new to insurance. To ensure efficiency, the firms utilize technology to swiftly process and facilitate claim payments within a timeframe of three days or less, offering customers the convenience of managing their entire claims process through the WhatsApp platform. By capitalizing on the capabilities of our fraud-scoring algorithm, the majority of claims are settled within hours, he added.
Augustina Onojake Steve, Assistant Director of the Complaint Bureau Life at the National Insurance Commission (NAICOM), discussed the reasons behind the low penetration of insurance in Nigeria during her presentation at an industry forum titled ‘Re-awakening the Nigerian Insurance Industry Through Claims Settlement’. As she diligently monitored the key problems linked to delayed settlement of claims, she emphasized the cruciality of companies taking charge and upholding their integrity to safeguard the reputation of the industry.
Related Article: What to Expect from Insurance Operators
Michael Kalu, the Head of Heir’s Life Insurance, emphasized the importance of investing in technological systems that can meet the growing demands of innovation. In his opinion, making insurance more user-friendly should be a priority, and this can be achieved by utilizing everyday online platforms such as WhatsApp. During the recently concluded IMT 2.0, 2023 conference held in Lagos, insurance experts in attendance advocated for enhancing financial inclusion by harnessing the potential of technology in the sector. They suggested a collaboration between regulators and innovators to overcome obstacles hindering the innovative solutions within the insurance industry.