Nigeria’s traditional insurers failing to leverage technology
Experts in the Nigerian insurtech space have noted that traditional players have, so far, failed to leverage technology to increase insurance penetration across the country’s population.
This remark was delivered by leaders in the insurtech space, on the third day of the Nigeria Fintech Week, held on 26 October, 2023.
The session focusing on the theme ‘Diversification: Leveraging insurtech for inclusion and empowerment’, was hosted by Dr. Tunde Salako, MD, Africa Insurtech, who commented that insurance penetration is driven by affordability, accessibility and availability.
Michael Kalu, head, Heir's Life Insurance, said there needs to be investment in ‘the systems that enable the industry to meet the demands of innovation’.
He noted that insurance should be made more user-friendly through technology applications that people use every day. He gave the examples that insurance can be sold on WhatsApp and through USSD.
Bode Pedro, CEO, Casava Inc, said that the traditional insurance companies tend to be stuck in comfort zones, fixated on what they know how to do, but said technology can improve efficiencies.
“If the insurance is inefficient at processing claims, it's going to cost them again. Elimination of fraudulent claims using AI and machine learning will be more effective. You use AI and machine learning to detect fraudulent claims,” he added.
Speaking on the sidelines of the event, Dr. Oluwatomi Oromosele, GM, EfiNA agreed that there is a need to extend insurance services to the underserved through the adoption of modern technologies.
“The underserved are not just people in the rural areas, we are the underserved. The underserved are 97% of Nigerians. Traditional players are not efficient. Technology has set in, but some traditional players have failed to adopt it,” she said.
She said the COVID-19 pandemic, increased digitalisation across the continent, with 16% of adult Nigerians in 2018 having used digital financial services, in 2018, but the figure jumped to 28% in 2020.
Oromosele added that the country’s banking sector had made improvements in access to financial services products, thanks to technology.
“There has been a lot of technological integration with banks; insurance companies are not even close. There is a need to deepen inclusion. There is a need for insurance companies to work on applications as this will better the cause of the underserved,” she said.