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, entertainment and consumer products have been impacted in the way they attract and retain customers.
Abiodun Aribike, The head, Information Technology of the commission stated this during his paper titled “Improving Access To Insurance In Nigeria Through Digital Solutions: Challenges and Prospects” delivered at Retreat for financial journalists event saying 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. According to him, if this is not done it will be difficult to deliver on customers’ expectations adding that it is time for Insurers to evolve and respond. This will require a different set of skills, culture and operating model, he added.
He noted that insurance penetration is a measure of the contribution of Insurance to the Gross Domestic Product (GDP) which it is calculated as the ratio of total insurance premium to gross domestic product in a given year. He further noted that it is also an indicator of Insurance sector development within a country and how much it contributes to the National Economy but however, it does not indicate how many people have insurance coverage, the quality of the coverage and the value it provides for insurance consumers
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The retreat for financial journalists is an annual event organized by National Insurance commission (NAICOM) with theme: Improving insurance Access Through Market Development and Innovation in 2022 and beyond held at Uyo, Akwo Ibom recently
Aribike cited Nigeria Insurance Market Penetration rates for the past 6 years as follows:
- 2016 48%
- 2017 54%
- 2018 61%
- 2019 71%
- 2020 72%
- 2021 88%
He disclosed that an estimated 2% Nigerian Adults are covered by Insurance today while urged all stakeholders for the adoption of the following technologies will help in providing digital solutions for increased insurance penetration:
- Cloud computing
- Mobile technology
- Artificial intelligence (AI)
- Distributed ledger technology and Blockchain
- Internet of things
He pointed out that in the digital age, product innovation comes from an adequate understanding of customers desires, needs and wants (both emotional and practical) and the ability to quickly get those products to them through the most relevant channels. There is also a need to build innovation into the whole fibric of the Organization, he added.
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Instead of building products to address an extensive set of risks, Aribike said companies should design products in response to specific customer needs and challenges, some of which may not be obvious. Insurers should stay close to their stakeholders and continually deliver what customers need in the fast-changing digital world, he stressed.
“The Insurance industry needs to catch up quickly with new technology, innovations, changing environment (from traditional to digital), developments and changing customer expectation.
“There is an urgent need for the Insurance Industry to adopt technologies to provide digital solutions. When this is done it will improve access to insurance by
- Providing Digital channels of distribution
- Enhancing Easier access to Insurance products and coverage
- Providing Cost efficiency for Policy holders and insurers
- Speedy issuance of coverage and claims payment
- Providing Innovative products
According to the paper presenter, Nigeria as at September 2021 has 195,128,265 active GSM Lines. About 90% of the population has mobile phones, 50% are connected to the Internet and 32% has a Smartphone, he said.
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The technology can be used to communicate, provide products and services while Smartphones can be used to engage policy holders, capture data, spot trends and provide tailored insurance products to customers, he noted.
“New technology is already disrupting the claims processing and the industry is advised to invest in data-driven and analytics-enabled customer experience that incorporates artificial intelligence (AI) and other advanced technologies. This will transform claims from a necessary back-office function into a source of competitive advantage, market differentiation and increased customer loyalty.
“It is time to provide self-service, single point of contact, multichannel First Notification of Loss (FNOL), electronic submission of documents, digital claims status tracking, online self-scheduling tool for claims adjuster appointments, automated intelligent case management, automated claims management and automated settlement.