Thursday, December 17, 2020 / 11.17AM / OpEd By
Ekerete Olawoye Gam-Ikon / Header Image Credit: The Telegraph
To many observers
and customers (existing and potential policyholders), the insurance industry in
Nigeria is changing very quickly to offer better experiences for shareholders,
customers and the insuring public.
There are emergent
online platforms and mobile applications, products and indeed, new operators to
justify the changes anticipated and the expectations held.
Quite
interestingly, it is becoming a situation of what you may choose to believe, as
the regulator, National Insurance Commission (NAICOM) has reiterated its
commitment to ensure that insurers with outstanding claims payments will not
scale through the recapitalization process, which deadlines are in the first
instance, December 31, 2020 and finally September 30, 2021 pending the outcome
of appeals received from the House of Representatives and others for another
shift in the deadline.
In my opinion,
and with due respect to the parties affected by these recent actions, we are
having the insurance industry in Nigeria put on a new skin; a process that is
necessary for the attainment of the operating environment that we deserve,
after the lessons from COVID-19 pandemic and the #EndSARS protests that
resulted in violent and wanton destruction of public and private properties
across the country.
Accordingly, there
are emerging, primarily, two "classes of insurers" namely the Olden
New and the New Digitizables!
The Old Shall Become New
Pressed to accede
to the demands of new customers amongst digital natives for new products and
means of communication, the older insurers or incumbents are beginning to
invest in new methods and techniques to reach and serve customers.
Three years ago, at
an industry wide conference where the role of technology in driving insurance
penetration in Nigeria was discussed, many operators were concerned about their
future based on the submissions of the speakers and panelists. However, the
regulator assured them of "protection" as no licences were going to
be issued to non-insurance entities. Seemingly, operators, namely insurers,
brokers and agents have been taking their time to ascertain the solution best
suited for the achievement of growth in terms of clientele and income,
notwithstanding the economic challenges confronting us.
Today, like in
other sectors, the activities of tech startups are advancing into the insurance
industry, essentially through fintech which has positively impacted the banking
industry. Little surprise NAICOM is establishing the Regulatory Sandbox to receive
and address the increasing interests of tech solutions providers.
However, the
responses seen from older insurers have given the market confidence that the
new battle for customers will not be won by technology alone.
These oldies are
renewing their actions towards the areas that earned them the confidence of
customers in the past, for example, prompt payment of claims. They are relying
on new ways of communicating, especially social media, to let Nigerians know
how much they had paid out in claims over the last decade.
Based on the
understanding of the workings of insurance, more Nigerians are interested in
the insurance companies that have the ability and willingness to pay claims
promptly to their customers.
To put it
differently, when the elders DECIDE to play the game, they change the rules,
and that is what seems to be happening amongst the incumbents.
Digitizing the New Experience
Nigerians that are
aware of insurance can expect better experience especially from the relatively
new insurers, those newly licensed or those acquired by new investors to the
insurance sector.
Having studied and
appreciated the challenges and opportunities for insurance, these new players
are poised to offer insurance in the way people have expressed their desires to
have it and for the purpose they want it to serve.
Indications from
recent unstructured survey revealed that the use or value of insurance has
become a greater determining factor for buyers. Put simply, if I cannot use my
insurance, why should I buy it?
So, the new
digitizables know that, for example, the life insurance policy given to the
customer should enable him/her enjoy access to credit. Also, the customers need
to believe that when something goes wrong, they can make a claim and payment
would come without much ado.
If customers can
obtain information without the stress of explaining where they are calling
from, whom they want to speak with and if they have prior appointment, amongst
other questions, they will more likely get it from these new insurers.
New Challenges
The new challenges
that would arise with the service improvement provided by the new insurers
would most probably lead to innovative products and exciting experiences for
customers.
No doubt the
regulator and trade associations of the respective operators have the challenge
of ensuring that the technology solutions are well tested and capable of
scaling to serve a far more expansive market.
In these challenges
are the new opportunities that can be explored towards improving the insurance
experience for Nigerians, and the time to do it is NOW.
The new can be newer indeed in the insurance space. We watch.
About the Author
Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a
management consultant with a specialization in Strategy and Insurance. You can
contact him via e:mail olagamola@gmail.com and
mobile +234-806-648-1111
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