The Nigeria’s insurance industry has remained much the same for decades, largely due to a risk-averse culture that has been resistant to change. But this is about to change with the coming of Insurtech, a technology that lies behind the creation, distribution and administration of insurance business, riding on smartphone apps and wearables.
The technology will disrupt the industry in such a way that both investors and insurees’ confidence will be regained as claims processing tools, online policy handling and automated processing will ride on the Insurtech initiative. It will also be useful for collecting and analysing customer data to provide a better service.
Seen as a sub-sector of ‘FinTech’, Insurtech is entering the industry as an opportunity to create partnerships and build mobile strategies focused on providing value in this increasingly digitized financial ecosystem, which general poor customer experience and lack of trust are visible.
The insurance industry is ripe for disruption, no doubt. This is largely due to several factors such as barriers to entry created by a regulated market and capital requirements; the potential for new technologies to have a relevant effect on insurance businesses and the low-cost of building and maintaining new technology; compared to incumbent legacy systems.
Already, stakeholders are showing excitement, saying the coming of Insurtech just like Fintech will revolutionize the insurance industry and make it more viable. According to Mr. Temitayo Adigun, a Lagos based insurance broker, Insurtech will transform the Nigerian insurance industry in the area of satisfying customers’ expectations, who are looking for mobile insurance solutions that integrate several areas of assistance on a single platform.
“For some of us who play in this industry, it is an in interesting and transformative idea as it will financially protect investors and insures,” he said.
He added that Insurtech is a challenge for the industry and also present a good reason to believe that insurance is indeed heading down the path of disruptive innovation, whether it is the effect of an external factor, such as the rise of the sharing economy or the ability to improve operations using artificial intelligence.
With Insurtech, the industry will be forced to step up its game in terms of customer service and offering as it empowers customers to take control of their insurance, demanding the products that really benefit them. What this also means is that players should be able to come up with tailored products, rather than one-size-fits-all, with the greatest percentage of consumers demanding their insurance products delivered through mobile.
Already, some insurance companies and other technology solution providers are seeing the coming of Insurtech as an opportunity rather than a threat and are investing in startups to help them drive the innovation they seek.
One of such technology solution providers that readily come to mind is Inlaks, a Pan-African technology company, which last weeks locked up twenty young and enthusiastic Africans into their newly unveiled hub with the aim of revolutionizing the African insurance space.
Tagged the ‘thehatch’, Inlaks said it built the hub to provides a nurturing environment for some young and innovative Africans to build and scale up technology ideas that would ultimately rejig the insurance industry and position it for growth, stressing that the hub will significantly address challenges in the insurance sector with technology enabled solutions.
“With thehatch launch and the maiden Insurtech Hackathon, we have been able to bring together a host of brilliant African tech minds who has innovatively invented solutions tailored to the insurance industry. I am elated at the launch of our Tech Hub as we are focused on opening up new markets while also introducing innovative information technology products into the Sub-Saharan African markets,” Olufemi Muraino, Executive Director (Innovation and Business Transformation) at Inlaks told Journalists at the launch of the Insurtech Hackathon in Lagos.
Muraino added that Inlaks’ vision for thehatch is to be Africa’s most sought after center for innovative technology, human capital, and start-ups ready to transform the economic future of Africa. He also disclosed that the solutions that will ultimately come out from the hub would influence the Insurance industry in Sub-Saharan Africa, which has largely remained untapped.
A critical analysis of InsurTech as an initiative shows that it can transform the Nigerian insurance industry in the area of satisfying customers’ expectations, who are looking for mobile insurance solutions that integrate several areas of assistance on a single platform. Mobile devices are a core element of everyday life; they have created massive waves of disruption in every area of business, and financial services are no exception.
Insurtech like Fintech will provide value to the millennial customers, who largely favour mobile channels for financial transactions. Several research findings have shown that the millennial are more likely to swap financial services and insurance policies to fulfill changing needs. They value convenience, remote transactions, and as little direct interaction with institutions as much as possible.
Similar to FinTech, Insurtech have many advantages insurance companies can leverage. Lean startups are free from legacy products and processes; they can use emerging technologies to build brand new systems; they can target specific value pools instead of offering lengthy end-to-end solutions that don’t meet everyone’s needs