By Chiamaka Ajeamo, [email protected] 08060655687
Indeed, the swiftness of the COVID-19 pandemic outbreak imposed enormous pressure on all businesses including the insurance business but one of the major challenges it brought up for Nigerian insurers, was the accelerated adoption of digital technologies which resulted in the inability to market or sell insurance products to consumers physically which in turn, reduced the premium income for the industry.
This challenge further highlighted the need for the industry and insurance companies in particular, to have a robust online automated marketing and feedback system to sell insurance products and hence; reduce the dependence on in-person sales and marketing which has mostly been the modus operandi.
Fortunately, the National Insurance Commission (NAICOM), earlier in 2020, while speaking to Journalists about its agenda for the year, stated that it was shifting focus from compliance issues to emphasise more of its market developmental responsibility which includes digitalizing all the operations and processes of the industry.
In the words of the Commissioner of Insurance/CEO of NAICOM, Sunday Thomas, “Ensuring the right pricing of insurance products and effective deployment of technology for ease of transaction are among the key areas the Commission will be emphasising this year.
“Digitalisation of insurance business is no longer an option, but an imperative which we all have to work towards its actualisation. As we may all be aware, the industry is currently lagging behind other financial services sectors in this area. The Commission is working vigorously to see that all its operations are digitalised. The year 2020 is a year for us to turnaround the fortunes of the industry and this cannot be accomplished without digitalising our processes and encouraging the industry to imbibe same.”
In the light of this, NAICOM later in the year, launched a real-time portal to regulate the operations of the sector, enhance insurance penetration, check the issues of fake insurances, claims management, boost premium income among other issues.
According to Thomas, the portal, which has been in the works for six years, was concluded recently as part of ongoing reforms by the commission to fully digitalise all operations in the sector and drive industry regulation.
Explaining how the portal functions, the Deputy Director, Information Technology, NAICOM, Abiodun Aribike, said the platform, which will fundamentally capture all insurance policies issued in Nigeria as well as increase productivity and revenue for the industry, comprises the Insurance Policy System, the Licensing System and the Regulatory and Financial Returns system.
He added that the platform would equally provide access to statistical data of the industry, generate a unique policy identification number for all issued policies necessary to ensure fidelity and validity of all policies in the country and also obtain and manage information on all insurance policies, and premiums sold by insurers, brokers and agents.
Aribike stated the platform would also “provide information on policies to members of the public and offer management information to NAICOM regarding summary and/or details of all policies by company, broker, and agents. It will also be a single point of contact between NAICOM and all operators as well as streamlining approval processes for registration and renewal of licences etc.
“Ensure proper accountability of all premium returns by insurance companies, captures all businesses done by every broker through the underwriter, ensures proper accountability of all insurance levies received from brokers.
“Provide easy access to data regarding policies issued, to support analysis and policy-based decision making, provides a means for members of the public to validate the insurance policy issued by the appropriate insurance stakeholder and allow law enforcement personnel to verify any insurance instrument tendered to them in the course of performing their function.”
Speaking on the insurance policy system, he noted the platform has been designed to capture all insurance policies issued in Nigeria with a unique identifier, stressing that it will generate a unique identifier for every policy issued by insurance companies and enable insurance customers and third-party entities such as law enforcement agencies to query and validate their insurance policies.
Most importantly, it provides NAICOM a platform for interconnecting all industry stakeholders to support real time aggregation of data on policies at the time of underwriting and policy issuance, and; enable NAICOM to monitor the claims payment process, he said.
Highlighting how the licensing system works, he noted it has been designed to automate the core business processes at NAICOM involving registration and renewal of licenses, approval for new product, Approval in Principle (AIP) and attestation approvals.
For the regulatory and financial returns systems, currently in the conception phase, he said; it provides the platform for the submission of all insurance industry regulatory returns and compliance electronically.
“The financial analysis module of it aims to automate financial analysis, credit control functions, computation of levies, and provide adequate and timely information to support management decision making. The system will also provide a database which will serve as a central repository for current and historical financial information about the Insurers, Re-insurer, Brokers and Loss Adjusters for regulatory purposes and general information dissemination.
“All of these processes will proceed in the portal environment from the application stage where all supporting documents are provided, to the review phase, the approval phase and license generation where applicable”, Aribike said. He further disclosed that the portal also has a complaints management system which serves
as a platform to manage end to end complaints management process as this will help in handling, managing, responding to, and reporting to stakeholder complaints.
“The software will also help streamline the approach and provide constant monitoring to ensure faster resolutions. This will enhance stakeholders’ satisfaction, increase claims payment and deepen the Insurance penetration.”
Commenting on this development and what it portends for the sector, the Managing Director/CEO, Anchor Insurance Company Limited, Mr. Ebose Augustine, said following the effects of coronavirus pandemic on business landscape and the economy, 50 per cent of insurance businesses are done through digital platforms.
Augustine stressed that the pandemic has forced operators to go digital and reinvent its processes and customer experience as well as how to meet the expectations of the public.
“Nigerian youths prefer to do insurance businesses through the social media platforms than in person. The youths don’t come out to buy insurance physically, they prefer buying through social media platform. The insurance industry is also leveraging on these platforms to drive sales. The impact of the pandemic has made us to regain our human capital, ICT and our processes.”
“Before the pandemic, insurance awareness in Nigeria was very low compared to other advanced economy and that is why the Nigerian Insurers Association (NIA) is sensitising the public and creating awareness to deepen insurance penetration. The pandemic affected every business, so, we expect that insurance will also be affected.”
“Part of this awareness creation initiative is what our regulator is doing by digitalising all industry operations and processes and upscaling the compulsory insurances so that the members of the public that are not purchasing insurance will buy at all levels, this will impact positively on the sector and generally on the Gross Domestic Product (GDP).”