Amaka Obiefuna

Digital technology has taken the world by storm affecting, changing and improving the way things are done.

It is disrupting traditional operating structures and industries such as telecommunications, media, and entertainment as well as consumer products being impacted in such a way to attract and retain customers.

The Insurance Industry is currently lagging behind and needs to reassess its business model, re-evaluate their strategy and make the digital agenda a high priority. It’s time for insurers to evolve and respond to these changes in order to meet up with customers’ expectations; and that requires a different set of skills, culture and operating model.

These were the views of Mr. Ibrahim Ngaski of the Department of Information Technology National Insurance Commission (NAICOM), while presenting his paper entitled ‘Leveraging Technology to Promote Insurance Penetration’ at the recent retreat for insurance journalists in Uyo, Akwa Ibom State.

Ngaski noted the emergence of core technology trends in the past few years that are affecting nearly every industry, pointing out that a multitude of technological advancements and shifts are reshaping the way products and services are accessed and or how they are delivered to customers.

He defined insurance penetration as a measure of the contribution of Insurance to the Gross Domestic Product (GDP), adding that it is also an indicator of Insurance sector development within a country and how much it contributes to the national economy.

However, he said it does not indicate how many people have insurance coverage, the quality of the coverage and the value it provides for insurance consumers.

Ngaski went ahead to outline technologies that can be adopted to help in providing digital solutions for increased insurance penetration to include Cloud computing which enables the delivery of various services over the internet, data management and its flexibility).

It also includes Mobile technology – a timely method used in communicating and marketing varieties of goods and services across different customers, thereby bringing services nearer to them which increases customer experiences.

Also among the technologies to be adopted according to the expert is ‘Internet of things (IoT)’ which refers to the internetworking of physical devices, vehicles, buildings and other items (also referred to as “connected devices” and “smart devices”), embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data.

“It is a network of smart devices connected to the internet. Insurers are increasingly leveraging the IoT for various purposes, including identification of customers’ needs and risks. This is achieved by wearables to monitor our health and smart devices in cars and consumer products in houses. They are used to collect, share, interact with and analyse data,” he explained.

Continuing, Ngaski said NAICONM introduced the Regulatory Sandbox which is aimed at providing a test environment on business models, products and services that will enhance efficiency in meeting consumers’ needs and drive innovations to reach the uninsured.

He explained that the regulatory sandbox is released to experiment with innovative ideas in a relaxed environment with the aim of increasing insurance penetration in Nigeria and conforming to the Country’s Financial Inclusion Strategy.

Areas allowed into the Sandbox are insurance solicitation or distribution, Insurance products, Underwriting, Policy and claims servicing and any other activity within the insurance value chain.

He spoke on Insurtech as the use of technological innovations designed to make the current insurance model more efficient.

His words: “The term ‘Insurtech’ is coined from the combination of two words ‘Insurance’ and ‘technology’.

“People in modern society want to be able to buy travel insurance, life insurance, health insurance, property insurance, and other products with the tap of a finger on their devices, rather than having to sift through stacks of forms.

“Insurtech start-ups are aware of this and have developed a method for people to obtain easily accessible and ultra-customised insurance policies.”

He announced that NAICOM recently partnered with FSD Africa 2022 to launch the BimaLab Insurtech initiative in Nigeria, which will allow for the implementation of ideas for improving insurance in the country, adding that already in existence are active cohorts following a ten-week training of innovators.

“BimaLab Nigeria aims to close insurance market gaps by educating, nurturing, and promoting innovations and Insurtech start-ups. The innovators were selected to participate in the ten-week programme that provided them with the expertise, resources and support to develop and scale market-ready solutions that bring social and or commercial value to Nigeria’s Insurance sector by bringing creative ideas to the table.

“The following cohorts were selected from the accelerator programme and they are currently active within the insurance space as indicated: Pay U – offering pay as you go policy, Wella Health – providing access health insurance, Izanu Africa – aggregating farmers for cheap agricultural insurance cover, Botsurance – providing digital insurance distribution service,” the insurance technology expert stated.

On the way for the Insurance Industry process automation in Nigeria, Ngaski said Insurance companies can maintain a competitive edge by automating, improving and optimising their business processes without compromising efficiency, quality, and response time.

This, he said, would enhance employee productivity, speed-up processes, raise customer service levels, improve customer experiences, reduce operational expenses and increase operational efficiency.

He stressed the urgent need for the Insurance Industry to adopt technologies to provide digital solutions, stating that when this is done it will improve access to insurance by providing digital channels of distribution, enhancing easier access to insurance products and coverage, speedy issuance of coverage and claims payment and also provides innovative products to their customers.