Embracing Automation: Reshaping the Future of Nigeria’s Insurance Sector

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The industry experts in Nigeria are emphasizing the imperative for insurance firms to adapt swiftly, reassess risks, and invest in transformative technologies. Advocates argue that this strategic shift toward automation is essential for maintaining competitiveness in the dynamic market.

Professionals in the insurance sector are urging a proactive approach from operators as we navigate through this year. The focus is on automating claims processing, fostering heightened customer engagement, and bolstering the workforce with artificial intelligence (AI) capabilities. This evolution, fueled by real-time data streams, is envisioned to empower better-informed underwriting and pricing decisions.

Eddie Efekoha, the Group Chief Executive Officer of Consolidated Hallmark Holdings Plc, underscores the significance of last year’s market reconfiguration. He emphasizes the need to amplify digital channels for broader product and service distribution, anticipating a heightened adoption of technology in the New Year. Efekoha notes that insurers are striving to be tech-enabled, leveraging data mastery to swiftly evaluate and price risks while delivering timely services to customers.

The industry players predict a shift from a passive acquisition approach to a more strategic one, buoyed by the Central Bank’s efforts to stabilize interest rates. Alfred Daudu, CEO of FSL Insurance Brokers Limited, anticipates economic growth in 2024, urging underwriting firms to innovate with products tailored to address specific needs and enhance industry awareness.

A recent report by GlobalData forecasts a Compound Annual Growth Rate (CAGR) of over 10% for Nigeria’s insurance market between 2023-2027. This optimistic outlook aligns with the seven-point agenda of National Insurance Commission (NAICOM), introduced toward the end of 2023, aimed at transforming the sector.

Commissioner for Insurance, Sunday Thomas, outlines the strategic thrusts, emphasizing the need for regulatory environment transformation, a shift to a risk-based capital model, enhanced insurance awareness, diversified product offerings, improved distribution channels, digitalization, talent pool development, and support for Nigeria’s economic transformation.

Thomas asserts that resilience and focus of NAICOM on transformative initiatives have bolstered distress management and market restructuring. Notable achievements include the implementation of Project E-Regulation, a Business Process Management Solution, and the NAICOM Portal, contributing to efficient processing and tracking of insurance policies.

Despite economic uncertainties in other sectors, the insurance deals market remained active in the latter half of 2023. KPMG’s CEO Outlook for the industry in the new year indicates that over half of insurance CEOs (55%) are inclined towards acquisitions, recognizing the value of mergers and acquisitions as strategic tools.

Business leaders anticipate that generative AI will enhance communication with policyholders, streamline claims processing, and combat fraudulent activities, positioning the insurance sector for a future defined by innovation and efficiency.