Meeting customer expectations and long-term sustainable growth of the insurance sector will ride on the adoption of digital capabilities, according to an FITC Insurance CEO and Industry Report 2024 recently published.
According to the Agency, embracing this shift is essential for insurers seeking sustainable growth and relevance in an increasingly competitive market.
The report, which focused on data accessed from chief executive officers of insurance companies, noted that only insurers with stronger digital capabilities would be in a better position to meet consumers’ expectations in the long term.
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The Report notes, “Innovation is important to businesses and when coupled with technology, the organisation is guaranteed a great leap in the direction of success and business growth.
“The implementation of compulsory insurtech goes a long way to aid the immersion of microinsurance as capability is built within the system to aid the development of microinsurance products using deep analytics and artificial intelligence.
”The report recommends that regulators, telecommunication operators and insurance organisations should come together to chart a sustainable environment to implement insurtech in the Nigerian insurance industry.
”The partnership with telecoms operators is non-negotiable considering the mobile penetration rate estimated at over 70% alongside the alarming number of Nigerians without a health insurance policy forms potential grounds to increase insurance coverage.”
”CEOs with less than five years tenure significantly selected the use of smart devices, social media, big data and cloud computing, and AI & machine learning to drive the growth of their individual organisations.
“There is a hindsight for insurtechs to create partnerships with insurance companies with a high level of digital awareness and capabilities to create front-burner and technologically competitive insurance products and solutions.
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”Taking South Africa as a perfect model, leveraging technology will help increase insurance services sophistication, which in turn, helps build the confidence and trust levels of customers”, the report said.
“Technological advancements will not only enhance operational efficiency for insurance companies, but also improve customer experiences and drive the Nigerian insurance industry forward.”
”Participant CEOs in the report mentioned huge investments in technology as a competitive advantage for high-capital insurance firms, especially when big insurance companies in Europe acquire local insurance firms as subsidiaries in West Africa.
”In this case, technology spillovers, quality management team, improved processes and sophisticated insurance products and services aided their acquisition of a significant market share amidst local rivals.
”Local firms can bridge this gap by solid recapitalisation aided by mergers with other insurance firms and total adoption of technology, collaboration with insurtechs, telecom operators, deposit money banks and regulators and adoption of artificial intelligence to improve customer engagement and experience.
“These brilliant technological adoption strategies to increase the scope of the insurance business within the Federal Republic of Nigeria require dynamic regulations to aid their rapid impact on the market niche.”
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The National Insurance Commission (NAICOM) needs to increase its internal capacity to synchronise regulations to emerging dynamics in the insurance space.
”The growth in insurance sector’s total assets from the Year 2020 figure of 1.8 trillion to 2.33 trillion by Q4 2022 depicts a consistently upward increase in gross premium income and steady claims payment payout ratio across life and non-life businesses, so mirrors significant improvements by insurance firms and other key players in the insurance sector.”
