Should insurance be sold or bought?

Insurance is considered as the sale of promises, what has made its penetration so low in struggling economies like in the Sub-Saharan Africa where other priorities have always overcome the need to buy or own an insurance product spare for the mandatory motor products. This phenomena has seen insurance being branded a dead rock with very little hope of revival even widely said to be a business of ‘making losses’.

At a recent insurance and technology (Insuretech) event hosted by CIO East Africa in Nairobi, insurance industry players agreed to let it die thus its rebirth. But contrary to this ‘dying’ notion, insurance is actually a thriving industry worth investing in especially in Sub-Saharan Africa owing the forever low penetration that rests at below 3% of the GDPs.

At the 8th Annual CIO Conference 2019, jointly organized by the Nigeria Insurance Association (NIA), Serianu, Information Technology Committee and Turnkey Africa Ltd – a leading Pan-African insurance technology and services provider headquartered in Nairobi, collaboration with Serianu and  Tezza Business Solutions among others at the Trademark Hotel in Nairobi, it occured that if well innovated, insurance would be a top performer in the entire financial industry in the continent just like it is in developed economies.

The CIO of Niger Insurance PLC and the Chairman for the CIO Organizing Committee for Annual Conference 2019, Kunle Kuponiyi said the conference was purposely held in to foster collaboration in the insurance industry in Africa for its seamless growth. The annual event on its eighth year running has been hosted twice in Ghana and five times in Nigeria and for the first time in Nairobi’s Trademark Hotel.

“Nigerian Insurance Association organizes this conference every year in different cities, we’ve done it in Nigeria, Ghana and now in Kenya,” he said. “The conference is held to enhance collaboration between the insurance landscape in Nigeria and the larger Africa.”

He noted that it is an opportunity for meeting with other insurance service providers and technology specialists to talk about innovations and transformations within the insurance industry, and how to collaborate in trying to move the industry forward.

“We have always been pushing the idea of coming to Kenya, for over 3 years now. In 2017 we attempted and there was political unrest at the time so it wasn’t appropriate. We see Kenya as the tech hub in Africa, that’s why we came to interact with tech experts and also the insurance industry here.” Kunle Kuponiyi.

The conference whose primary vision was to  foster collaborating with other insurers in Africa  as a strategy to grow the industry and to create a wonderfully solid customer experience by leveraging on technology, onboarded the insurance authorities and regulators as a way to exchange ideas on how to better the industry going forward. Association of kenya Insurers (AKI) and insurance regulatory Authority (IRA) both had representation.

“As technology advances by the day, we need to be more innovative around it to churn out services and products that would suit our customers,” said Kuponiyi. “The goal of any business must be to increase and perfect customer experience.”

In Nigeria he said, technology has been used to harness insurance customer data into one portal called ‘insurance database’ where law enforcement agencies are able to retrieve legislation numbers so numbers not found on the platform are believed to be fraudsters are are dealt with legally.

This he says has enhanced trust among insurance consumers in Nigeria and to an extent grown the penetration that is still below 1% of the GDP.

“Insurance penetration is low in Nigeria because of recession in the economy and also due to fraud,” he says. “But we are trying to make the government help and back us in creating insurance products that are able to create a way to make sure fraud is finished.”

People think that insurance is a waste. People do not see the need or the reasons for insurance. We are trying to tell people that insurance will give you a peace of mind so that your beneficiaries will you something to fall back on.

Being proactive as opposed to being active he avers will help change the insurance landscape in Africa. Collaborating for exchange conferences like this, he adds would offer invaluable insights  with each other. Harnessing technologies to study the behaviors patterns of people and leveraging on AI and IOT to be able to look at the consumption and risks patterns.

He also suggests for PAYG pay as you go products that would suit consumers who only need particular products at specific times and see no need indulging in long term products and who he says have been locked out for a long time due to inability to tailor-make such products to them.

“We need to be able to convince the leadership in the insurance industries on how to make technology drive the business. This would help align the strategy and better the entire landscape especially about selling insurance,” he said.

He is convinced insurance is sold as opposed to being bought because of fraud that has for a very long time been a synonym of insurance in Africa. Insurance  should be packaged in glossy end products that would have consumers buy and not having them forced into buying it. Also, he advises the industry players to bring it close to consumers by selling online and on mobile as opposed to the traditional brick and mortar insurance companies and piles of forms to fill.

“We need to be able to create value for customers for the insurance products they consume by using analytics to help create value for customers. They must also enjoy mobile and digitized services like banks offer,” he added.

Whereas in developed economies insurance firms are the owners of banks, it is a complete different script here in Africa where insurances are owned by banks. This paradigm Kuponiyi vows to change by working together and learning from each other as insurers in the continent.

“The customer has taken over the world and so the need to satisfy and exceed their expectations,” adds Kuponiyi. Innovate and tailor-make products to satisfy the diverse needs of the 21^st century insurance consumers.

He however recognizes and applauds the improvements in the industry citing consumers gradual but steady efforts to trust in insurance products which he says is widely due to the incorporation of technology into service delivery.

Turnkey Africa Ltd which operates in Nigeria and has over 6 of the leading insurers in the market as their clients, was instrumental in getting the conference to Kenya.

Speaking at the conference was Turnkey’s Chief Operating and Technology Officer Mr. Shikoli who  alluded to ‘the power of strategic partnerships and ability to tap into ecosystems as a way for insurers to scale their innovations and solve complex challenges in today’s fast-paced environment.’

Also at the conference was the CEO Serianu, William Makatiani who lauded the Annual CIO Conference Organizers for hosting it in Kenya,  challenging Kenyan companies to start thinking of how to host some conferences in Nigeria to further enhance the collaboration.

“It’s a good testament of Pan-Africanism, while in the past they would have hosted such a conference in Dubai, they accessed the progress Kenya is making and decided to host it here,” said Makatiani, adding: “We’ve had very good discussions on cyber security and digitization in what was an invaluable peer exchange forum.”