From Ngozi Onyeakusi, Lagos
The National Insurance Commission, NAICOM, has urged Nigeria’s insurance industry to brace up to new challenges posed by digital technology to sustain its operations and contribute to national development.
Speaking at the 2019 National Insurance Conference in Abuja, Commissioner for Insurance, Mohammed Kari, sought the understanding of the industry to the wave of new reforms which he explained is a direct response of the disruptive impact on the insurance industry by a series of digital innovations in areas such as online sales technologies, machine learning, the Internet of things, advanced analytics and virtual reality, among others.
The Commissioner’s appeal was also supported by the call from president Muhammadu Buhari, who through his address at the conference urged operators not to work against the present recapitalisation introduced by NAICOM which is aimed at taking the industry to lofty heights.
The President, who was represented by the Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse, said at the ongoing programme with the theme: Disruption, Innovation and Business Growth, that the government will continue to support the industry to enable it contribute effectively to the growth of the nation.
He urged the operators not to fight the recapitalisation just because they could not raise the expected capital, stressing that the act to deepen insurance penetrations remains a responsibility to be carried out by all stakeholders.
Meanwhile, the Commissioner added that while the new technologies are already making it easier for consumers/policyholders to benefit from superior service and more choice as well as lower prices, there are corresponding challenges.
“Therefore, in order to remain relevant and become a critical contributor to the national economy, the industry must consciously be proactive and organized so as to take advantage of the opportunities provided by these disruptive developments while at the same time curbing their corresponding negative impacts.
“It is important to note that firms will only benefit from digital technology only if they embrace its potentials along the entire insurance value chain, including underwriting and claims management.
“This would therefore entail a rethink of the industry’s business strategy and alignment of its operational practices to contemporary economic context such as the Economic Recovery Growth Programme (ERGP) of the Federal Government, sustainable and inclusive insurance as well as exploiting the benefits of the implementation of the 2nd Phase of Market Development and Restructuring Initiative (MDRI), among others,” he posited.
Kari noted that from the regulatory standpoint, the need to exploit the opportunities of digitalization and to tame the cumulative consequence of inflation and devaluation of the Naira heightens the necessity for the ongoing reforms of the insurance industry such as, expansion of the insurance distribution channels, financial inclusion, corporate governance enforcement, market discipline, professionalism and the recapitalization exercise aimed at strengthening insurance institutions and increasing the spread of insurance in the country.
“Let me hasten to add that these reforms are in furtherance of the President Muhammadu Buhari’s administration’s determination to revamp the economy as encapsulated in the ERGP in order to ensure that the insurance industry becomes a significant contributor to economy of Nigeria,” he added.