Insurance September 5.0: Stakeholders Call for Tech Disruption of Credit Insurance in Nigeria

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Monday, October 11, 2021 / 10:00 AM / Oluwakemi Enitan Falayo for WebTV / Header Image Credit: WebTV

 

At the 2021 edition of the Insurance September meeting, stakeholders agreed that technology disruption would revolutionize credit insurance in Nigeria with a far-reaching impact.

 

Giving the opening remarks, the Convener of the 'Insurance September' initiative, Mr. Ekerete Ola-Gam Ikon, said the theme of the event "The Emerging Pace of Insurance," seeks to set the tone towards remaking insurance into a system that works.

 

As of December 31st, 2020, there were 1.03m individual policyholders, with the potential to increase to 10m+ in the Nigerian market.


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He believed that with the need to address the concerns of over 10m Nigerians whose insurance needs are unmet by the market, enforcement and the value-added process can see the gross written premium grow from N500bn to N1trn.

 

The insurance expert believed that product innovation and research were compelling cases for attracting and retaining valued clients in the market.

 

Speaking further, he said, "Nigeria requires more insurance companies to serve the uninsured and underserved population. Microinsurance and Takaful remain game-changers".

 

In her speech, Mrs. Bolaji Sofoluwe, the founder and manager of Enterprise Trade and Knowledge (ETK) Group, DIT Export Champion, talked about ETK as an Africa-focused Trade service company designing internationalization strategy also the Emerging Pace of Insurance in Trade.


She stated the risk and currency volatility in the age of covid-19, which include;

  • Currency risk in Africa, especially Nigeria, has been at an all-time high, suffering unprecedented volatility.
  • In 2002, huge losses were faced by businesses who refused to insure goods and services going across borders.
  • Before covid 19, exchange rate volatility had been trending downwards throughout the 21st century, especially since 2014.
  • The South Africa rand saw one of the most significant depreciation globally, with a 32% fall against the dollar in the first three months of 2020. The naira value against the dollar has been down over 26.5% over three years.
  • Many more significant currencies such as the Dollar, Euro and Yen remain relatively stable throughout Covid, particularly the volatility seen during the 2008 global financial risk.


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Speaking further, Sofoluwe mentioned the following as benefits of Export Trade Credit Insurance; global competitive advantage, cash flow benefits, reduce credit risks,  improves profit, At a macroeconomic level, facilitates international trade flows and contributes to global economic growth, enhances financial stability by risk-sharing and gives peace of mind to the supplier.

 

Looking at the prospects for the market, she said the technology would continue to drive the credit insurance market to become efficient and cost-effective.  She stressed that Nigeria is the centre of tech innovation, and data processing, analysis and machine learning may improve underwriting systems and risk determination.

 

"The market is expected to grow at a CAGR of 2.15% from $11B to $12.5B by 2023, driven by continuing uncertainty and shifting trade winds, in addition to the rise of the internationalization of small businesses". She added.

 

Other speakers at the event include; Mr. Lawrence Bitrus Atafache, CEO of Creatify Inc; Dr. Sunday Seno Agbonika, CEO of Collars and Paws Limited; Ms. Eno Essien, CEO of Rheytrak Limited; and Ms. Hauwa Bako Mohammed, COO of Bako Kontagora Development Foundation, who moderated the landmark event.


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