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.
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.
Related to Recapitalization