The Nigerian insurance industry is poised for a major leap forward, driven by the transformative power of Artificial Intelligence (AI). This exciting development was recently emphasised by Mr. Sunday Thomas, the Commissioner for Insurance and CEO of the National Insurance Commission (NAICOM), at the 8th BusinessToday annual conference & exhibition in Lagos.
AI has the potential to completely reshape how insurance companies operate in Nigeria. According to Mr. Thomas, AI can lead to a significant boost in productivity, profitability, and, most importantly, faster service delivery for customers, including quicker claim processing. This is a welcome change for many Nigerians who have had negative experiences with lengthy claim wait times in the past.
NAICOM, the insurance industry regulator, is actively involved in steering this transformation. They recognise the critical role technology adoption plays and are committed to developing policies that not only propel industry growth but also enhance market penetration, ultimately contributing to the nation’s economic well-being.
The conference also shed light on the concerning issue of low insurance penetration in Nigeria. Industry leaders, like Mr. Tope Smart, the chairman of NEM Insurance Plc, acknowledge the vast gap between Nigeria’s insurance penetration rate and global standards. Factors like the lack of enforcement of compulsory insurance policies are believed to be contributing to this disparity. There are positive efforts underway to address this challenge. The industry is collaborating with enforcement agencies to ensure wider adoption of insurance policies.
Another point of concern raised was consumer reluctance to participate in the insurance market. Negative past experiences, with slow claim processing or a lack of transparency, have led to a hesitancy to renew policies. Industry leaders want to assure Nigerians that there are avenues to address these grievances. Regulatory bodies like NAICOM and the Nigerian Insurers Association (NIA) are there to assist individuals with unresolved claims. This focus on customer centricity is a positive shift that will help rebuild trust with consumers.
The conference also explored the far-reaching potential of AI. AI can not only streamline service delivery and expedite claim processing but can also play a vital role in risk assessment and pricing. AI algorithms can analyse vast amounts of data to identify patterns and assess risk profiles with greater accuracy. This can lead to a more personalised approach to insurance, with tailored policies and premiums that better reflect individual risk factors.
Furthermore, AI can be a powerful tool for fraud detection. By analysing patterns in claims data, AI can help identify potentially fraudulent claims, saving insurance companies money and protecting honest policyholders. This can ultimately lead to lower premiums for everyone.
The adoption of AI is not without its challenges. There are concerns about job displacement as AI automates some tasks currently performed by humans. However, industry experts believe that AI will create new opportunities while transforming existing roles. There will be a growing demand for professionals with expertise in AI and data analysis to develop, implement, and manage these new technologies.
The future of Nigeria’s insurance industry looks bright. With the combined efforts of industry leaders, regulators, and the power of AI, consumers can expect faster, more efficient services, and a wider range of insurance products tailored to their specific needs. The industry itself stands to flourish, contributing significantly to the nation’s economic growth and job creation. In Nigeria, insurance will enter a new era that is characterized by innovation, effectiveness, and a commitment to customer satisfaction.
