By Chiamaka Ajeamo, [email protected]
Digitalisation of business processes and procedures empowered by technology has become a game-changer in many industries today. Even in sectors where adoption is low; it has enhanced efficiency and productivity to a reasonable extent.
Globally, insurance is one of the several sectors that technology is changing for better, although many insurance companies especially in Nigeria have not fully adopted the technological tools needed to run their businesses.
According to digital insurance thought leaders and insurtech experts; the reason for this challenge is that document management system in the industry is relatively poor when compared to other sectors in the economy such as the banking industry.
Another reason for this, they argued was the lack of regulatory guideline on Information Technology (IT) infrastructure for insurers and reinsurers to employ for both operational and reporting purposes. Hence, why manual services are still profound in the industry and this results to delay in claims settlement, fraudulent practices, mistakes and errors in the entire insurance business.
In the light of the above, these analysts are of the view that digitalisation is the way forward for the Nigerian insurance industry to boost its penetration level particularly, now that emerging trends such as; open insurance and Insurance technology (Insurtech) are redefining global insurance.
Also, studies have shown that the retail sub-sector of the insurance industry presents the next frontier to drive insurance inclusion in Nigeria, however the ability to create digital ecosystems by leveraging on the capabilities and existing resources of financial technology companies and other digital platforms who are adept at reaching large volume of users and building trust among low-income customers is the key to unlocking retail insurance opportunities for all players.
To this end, Coverdor in its drive to provide digital insurance solutions for the insurance ecosystem in Nigeria has launched a revolutionary insurance technology solution called FRUITI; an open insurance Application Programme Interface (API) to embed insurance components into third-party fintech applications and other digital platforms in order to help insurers reach millions of uninsured users, while also creating a new way for consumers to interact with insurance products.
Speaking to Daily Sun in an interview, the Co-founder/CEO Coverdor, Seun Ayegbusi described open insurance as an innovative and collaborative practice of sharing and consuming data and services by means of Application Programming Interface (API) with third parties both within and beyond the insurance industry in order to create more appealing value propositions for the customers, a new business vertical for the third-party service providers and increased revenue for the insurance operators.
Ayegbusi added that open insurance also allows insurers to insert insurance components into technology that allows third-party applications or service providers in any sector to integrate insurance products/services into their customer proposition either as complementary add-ons to their core offerings or as new components.
Highlighting the benefits of open insurance, he said for customers; it includes being able to access relevant insurance products when and where they need it the most and getting personalized services from the insurers when they authorised the sharing of their data with the insurers.
For insurers, it allows for ecosystem partnerships that reinvent their distribution activities and also gives them access to more data to enhance product innovation and reduce underwriting risk; and for third-party service providers, it enhances their value proposition and creates new business verticals and alternative revenue streams; he stated.
Ayegbusi further speaking, expressed that FRUITI API was birthed to drive open insurance in Nigeria, to boost insurance penetration and create incredible opportunities for the industry as a whole.
“Digitisation is the way forward for the insurance industry at this critical stage, as it benefits are enormous, the benefits are evidently seen in other industries like banking, retail, manufacturing among others. Digitisation will give the insurance industry a competitive advantage and also put it in a better place to meet the needs of emerging customers. It can also optimise the industry making it agile, scalable and efficient to deliver personalised, data-driven services to the 21st century customer; and this is what FRUITI API has come to do and more”
Explaining how FRUITI functions, he said; it aggregates insurance services from leading insurers and delivers them through a single API to enable fintech companies and other digital platforms offer insurances services to customers within their platforms.
“Through FRUITI, insurers can leverage the huge customer base and existing technology infrastructure and channels (web, mobile, Unstructured Supplementary Service Data (USSD) and Point-of-Sales (POS) outlets) of third party fintech companies, traditional and digital banks and other digital platforms to deliver retail insurance products to their customers many of whom are uninsured.
“For instance, a use-case exists that allow insurers to leverage Agency Banking Infrastructure by making use of hundreds of thousands of POS agents to perform insurance services like policy sales, payment collection and claims submission to customers who reside in rural areas and are often excluded from insurance inclusion. Using a bancassurance approach, banks and neo-digital banks can integrate the app to offer micro-insurance services to customers within their applications. Likewise, online lenders can use FRUITI to offer insurance-on-credit to their customers, while wealth management platforms as well can leverage it to bundle insurance products to their customers.
‘FRUITI also offers an innovative insurance distribution model that enables customers to purchase insurance products on-credit from online lending applications who have integrated FRUITI into their platform.
“FRUITI solves the customer trust issue affecting the insurance industry by leveraging the trusted channels of third-party service providers to deliver retail insurance products to the customers where and when they need it the most, either as a direct sale or used as a loyalty reward program for customers of these third-party service providers. “Imagine a traditional bank using a micro-health insurance plan to reward customer loyalty, thereby paying the insurance premium on behalf of the customers”.
He added that FRUITI is pre-configured with multiple micro-insurance products, allowing customers to sign-up for any of the insurance plans directly within the partner application. For instance, a customer can select to buy any of the health insurance plans to cover treatment for common illnesses like malaria, typhoid, among others, while also getting coverage for hospitalisation and life insurance benefit in an event of accidental death for a token in a monthly subscription. The app also provides a seamless experience for the customers allowing them to complete a paperless insurance transaction within one minute.
The Coverdor boss disclosed that FRUITI API has been tested with a number of third-party service providers and has proven to be effective and flexible, as it easily fits into the technology infrastructure and customer journey of these third-party service providers, allowing them to integrate with just the insurance components that fit into their customer journey.
“FRUITI is paving the way for the expansion of insurance services to millions of poor and vulnerable people who are mostly left out of the financial world,” Ayegbusi said, as he explains that it is of utmost concern to his company to help low-income customers and the vulnerable to easily access meaningful, innovative, and affordable insurance products that meet their needs by embedding insurance services into existing channels/platforms they trust and already use to access similar financial services like savings, payment, lending, or Cash-in Cash-out at POS agent shops.
“Through open insurance, Coverdor is facilitating a digital ecosystem among insurers, banks, Fintech companies and other digital platforms to create incredible opportunities to revolutionise insurance services in Africa, and it believes that APIs will be the lever for insurance inclusion and innovation in Nigeria and Africa as a whole”.