Stakeholders in the insurance and technology sectors have called for partnerships, collaborations, and technology adoption.

The stakeholders describe it as an expedited strategy for insurance penetration gathered at the Insurance Meets Tech (IMT) inaugural edition conference convened by Modion Communications in Lagos.

The experts from the Insurance, finance, and technology sectors from across Africa like Microsoft Nigeria, Ecobank Nigeria, Old Mutual Group, Leadway Assurance Company Limited, AXA Mansard, Curacel, ActivEdge Technologies, MediSmarts among others were present at the event.

Speaking on the role of big data and cloud computing in bolstering the operations of the Nigerian insurance sector, Country Manager, Microsoft Nigeria, Ola Williams explained that leveraging technology increases the brand value of insurance organisations and allows insurers to free up their capital outlay to accommodate potential customers.

He said: “Data is a source of wealth and power, and it has become a key disruptive factor that organisations leverage for competitive advantage. Cloud computing is also key to organisations’ insight acquisition for detailed reporting of different aspects of their operational efficiencies. Since insurance is the transfer of risk from one entity to another, as an insurer, data gives insight into the behaviours and preferences of individuals and as such, supports the provision of differentiated offerings to customers. Indeed, the limit to how we can use data is in our imagination”, she said.

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At the event, The Chairman, Nigerian Insurers Association (NIA), Olusegun Omosehin, cited the irrefutable importance of collaborations and partnerships between the insurance and technology industries in operationalising a digital-led customer acquisition journey, thereby deepening insurance penetration in Nigeria.

“To swiftly embark on this digital expedition, we must be willing to rethink our existing processes, especially the customer acquisition journey. We must also remember that this is not necessarily a race for intra-sector prominence but an opportunity to up the ante collectively for global dominance and deepening access to insurance”, he stated in his opening address.

On the functionality of technology for driving change in the Nigerian insurance ecosystem, the Group Chief Executive Officer, Old Mutual West Africa, Samuel Ogbu, said: “Insurance exists to solve problems and create value, and this can be achieved through collaboration and partnerships. However, the problems with insurance value creation in Nigeria have evolved, and solutions provided by insurers in this regard must align with the fundamental evolution and revolution of strategies. Innovation technology has a key part to play in the evolution of insurance value creation, and the knowledge of revolutionary insurance strategies relies heavily on data analytics which is a key provision of technology”.

The Executive Head of Sales, Leadway Assurance Company Limited, Sola Ajayi on his part added that the insurance industry is enthusiastic about technological innovation.

He also noted that though the sector had progressively slowed in the last two years, it would experience lots of unbundling of insurance products using technology.

TThe Managing Director/CEO PaddyCover, Mayowa Owolabi, highlighted the importance of regulatory enablement in achieving technological adoptions and collaborations in the insurance industry.

“The industry requires sensible, timebound, future-centric regulation that creates an environment to thrive”.

The Chief Executive Officer, Modion Communications and Convener, Insurance Meets Tech 2022, Odion Aleobua cited the huge potential of the industry and the capabilities of technology in catalysing its adoption and penetration rate.

He also highlighted the timeliness of the IMT 2022 conference as a continental kick-off of collaborative insurance and tech discourses.

The huge number of internet users in the country has presented an opportunity to leverage technology for retail distribution of life insurance products, the Managing Director/CEO, Heirs Life Assurance (HLA), Niyi Onifade, has said.

Onifade spoke at the annual retreat of the Nigerian Insurers Association Life Offices Committee while delivering a lecture to key stakeholders in the life insurance sector on “ICT Tools As Channels Of Life Products Distribution And Servicing In A Digital Age” in Lagos.

He encouraged life insurance practitioners to embrace technological tools and automation to facilitate accessibility and enhance customer experience.

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Reiterating the power of the internet in today’s business world, he spoke on customer preferences, advocating for the creation of simple and understandable life insurance products, noting that the attention span of the policyholders of today is short.

He said: “The old-school physical distribution methods through brokers and agents is still? relevant, but our process can be greatly enhanced digitally.

“Predictive and behavioural analytics could help serve customers with the relevant life insurance policies suited to their life stage even before they realise that they need life insurance.”

He urged the professionals to embrace an open-insurance, digital-led, insurance distribution and servicing system, highlighting the progress Heirs Life Assurance has made in digitally serving its retail customers which constitute about 70 per cent of its portfolio.

The National Insurance Commission (NAICOM) has said the correct amount generated by insurance companies in 2021 as Gross Premium Income (GPI) of N661 billion, The Nation has learnt.

This was made known by the commission in an exclusive interview following various disparities in figures quoted by the Nigerian Insurers Association (NIA), NAICOM and rating agencies as found by the newspaper.

Reacting to questions posed to the commission on why there are disparities in figures quoted as this may be misleading to the public, the Deputy Director and Head, Corporate Communications, Rasaaq Salami said the right amount is N661 billion.

GPI is an income statement that shows the total sum that an insurer has earned from premiums. It does not include any sums that are not paid or will be paid outside those premiums.

Findings showed that the umbrella body of insurance companies, NIA claimed the volume of business written by member companies grew from N508 billion in 2020 to about N560 billion in 2021, representing an increase of 10 percent.

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On the other hand, Agusto and Co, a credit rating agency and provider of industry research and knowledge in Nigeria & Sub-Saharan Africa claimed the total gross premium income reported in the Nigerian insurance industry remains stagnant at N520 billion in 2021 when compared to the figure in 2020 which was N592.3 billion.

According to the agency, the industry’s gross premium income declined by N72 billion.

Meanwhile, NAICOM said the total industry premium generated in 2020 stood at N520 billion recorded in 2020.

NIA Chairman, Mr. Segun Omosehin however kept mum when asked about the disparity.

Omosehin in NIA 2021 Annual Report however stated that the industry was not insulated from developments in the general economic space and had its fair share of the challenges facing the larger financial market during the year under review.

He said: “With epileptic power supply and an astronomic rise in the energy cost against the background of failing infrastructure, insurance companies had to contend with increasing cost of operations. These and many other factors including the multiplicity of taxes, contributed to affect the bottom line of insurance companies.

“Notwithstanding these challenges, the insurance industry continues to perform its statutory role of financial intermediation and business restoration”, he added.

The International Organisation of Securities Commissions (IOSCO) has published measures that members should consider when determining their policy and enforcement approaches to retail online offerings and marketing.

The measures outlined in the Final Report on Retail Distribution and Digitalisation aim to assist IOSCO members in adapting their regulatory and enforcement approaches, consistent with their legal and regulatory frameworks, to meet the growing challenges posed by rapidly evolving digitalisation and online activities.

Nigeria is a signatory and committee member of IOSCO.

The report presented a toolkit of policy measures to help members address risks that may arise and a toolkit of enforcement measures that leverage a range of powers and technology-based investigatory techniques and enhanced collaboration with other authorities and providers of electronic intermediary services.

The policy toolkit measures related level rules for online marketing and distributio, level rules for online onboarding; responsibility for online marketing; capacity for surveillance and supervision of online marketing and distribution; and staff qualification and/ licensing requirements for online marketing among others

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The enforcement toolkit measures related  to proactive technology-based detection and investigatory techniques; powers to promptly take action where websites are used to conduct illegal securities and derivatives activity and other powers effective in curbing online misconduct; and  increasing efficient international cooperation and liaising with criminal authorities and other local and foreign partners among others.

Digitalisation and social media are changing the way financial services and products are marketed and distributed to retail investors, providing greater opportunities for firms to reach a broader investor base and for retail investors to access a wider range of products. Digitalisation and social media also present risks associated with the use of behavioural and gamification techniques and financial influencers (finfluencers) that impact retail investor trading behaviour.

Developments in digital offerings, including use of new complex products such as crypto-assets, also give rise to novel regulatory and investor protection challenges, spanning the whole distribution chain. As digitalisation trends evolve faster than regulatory frameworks, there is a risk that retail investors could be exposed to harmful or even fraudulent online activity.

The Report analyses global developments in online marketing and distribution of financial products to retail investors and discusses enforcement challenges encountered by regulators. It sets out examples of how some member jurisdictions have addressed these issues.

The Report is part of IOSCO’s efforts to build trust and confidence in markets facing new and emerging opportunities and risks. The overarching objective is to enhance the protection of retail investors, the main recipients of online offerings and marketing techniques.

The rapidly evolving environment demonstrates the need for an increased regulatory focus on digital marketing and offerings and for efficient collaboration, on both a domestic and cross-border level, to promote a high level of investor protection at a global scale.

Responding to the IOSCO Report, Martin Moloney, the IOSCO Secretary General, said: ”A digital revolution is sweeping the world of finance. Financial product offerings and customer on-boarding practices are no exception to this change. This revolution allows firms to refine the techniques they use in their digital marketing. While that innovation promises to provide investors with well targeted information, it also creates new risks to investors via systemic targeting and unsolicited offerings, sometimes underpinned by gamification and ‘finfluencer’ activity that is not always helpful to investors. Digital fraudsters can hide behind a “digital veil” that makes it difficult for regulators to locate, identify and take action against them. We are publishing this policy and enforcement guidance, built up from the experience of our members, to respond to the complex conduct challenges in today’s digital world, and to achieve better financial consumer outcomes.”

Operators have hailed the revalidation of the licence of Staco Insurance Plc by the National Insurance Commission (NAICOM).

The revalidation has led to the appointment of a new Managing Director, Mr. Wale Banmore.

The company was enmeshed in board disputes that led to the exit of the former Managing Director, Mr. Sakiru Oyefeso.

The President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr, Rotimi Edun, expressed renewed confidence in the capability of the revived Staco to offer excellent services.

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Edu, who spoke at the October 2022 edition of the Annual General Meeting of the Lagos Area Committee of the Council, said the turnaround of the company under new management gives credibility would attract brokers to the company.

According to Edu, it is characteristic of organisations to have crisis, but what matters was the resolve to put in place strategies for quick and strong recovery, noting that Staco was an underwriting firm which had human capital, rather than technical issues, and that with the new leadership the confidence level of clients is again moving northwards for the company.

The Vice President, Professional Insurance Ladies Association (PILA), Mrs. Bimbo Onakomaiya, urged the company to continue to keep good track records of customer sensitivity.

Onakomaiya, who is also the Managing Director & CEO, Peakthrust Insurance Brokers Limited also charged the company to uphold professionalism at all times.

Banmore on his part noted that great attention has been paid to settlement of all outstanding claims by the company, a situation he said had started to turn around the fortune of the company positively.

The 10 African reinsurers recorded more than USD 18.3 billion in gross written premiums between 2011 to 2020, The Nation has learnt.

But global reinsurers’ capital dropped by 11 per cent in the first half of the year to $600 billion from $675 billion recorded at the end of last year.

The Deputy Managing Director of Africa Re, Mr. Ken Aghoghovbia, made this known at 26th AIO African Reinsurance Forum in Lomé, Togo.

Aghoghovbia, who delivered the keynote speech on theme, “Sustainable Growth: The Role of African Reinsurers in Economic Growth & Development”, stated that the drop in capital with the natural catastrophes and COVID-19 losses, has, however, created favourable reinsurance pricing in the global market.

However, the extent to which inflation is factored into the reinsurance pricing would determine their sustainability over the coming renewal cycles, he said.

Outlining the journey and outlook for the reinsurance sector, he said the challenging environment remained mixed, due to a high level of uncertainty.

He noted that with most reinsurers struggling to earn their cost of capital, the financial rating and outlook of market players would be ever more important in the next renewal cycles.

He said: “Moody’s, Fitch and AM Best have indicated a stable outlook for the global reinsurance industry, S&P Global Ratings has maintained its negative outlook. Underwriting results should remain favourable in the second half of 2022 and 2023 as rate increases stay ahead of loss cost trends, Fitch Ratings projects. However, it is instructive to note the caution by S&P. They have highlighted: ‘Although underwriting performance in property, casualty and life reinsurance is improving in the forecast for 2022 and 2023, the sector still needs to demonstrate its ability to sustainably earn its cost of capital before the rating agency could potentially revise their outlook from negative to stable. With most reinsurers struggling to earn their cost of capital, the financial rating and outlook of market players will be ever more important in the next renewal cycles.

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“As African markets are diverse and at different stages of development, the journey of reinsurers in different markets may not be the same. However, prior to independence of African states, the markets were dominated by foreign reinsurers. Many of the governments, soon after independence, quickly realised the importance of the insurance sector in the mobilisation of earnings to support economic development. Thus, they set up re/insurance companies to mobilise funds and stem the outflow of foreign currency. Subsequently, a number of private reinsurers were attracted to the market while many government-owned ones were privatised/commercialised.”

Aghoghovbia said yet, the foreign reinsurers still dominated the markets as most African reinsurers were not rated and characterised by low capitalisation and high cessions to foreign reinsurers.

“No wonder, therefore, that the capacity crisis in the international markets largely impacted the still dependent African market. For this reason, Africa Re initiated a position paper to the AIO executive committee to establish a platform where the insurance industry can meet primarily for reinsurance discussions to increase the volume of business retained within the continent. It is in pursuit of this vision that we are gathered for the conference.

“Africa has recorded positive economic growth and development in the last couple of years despite the array of political, social and economic challenges faced by most countries in the continent. Within the last 10 years, the reinsurance sector has seen the rise of strong African reinsurers—national, sub- regional and regional reinsurers—many of whom are represented here. Together, we have been able to deploy significant reinsurance capacity and have drastically reduced the flight of premiums out of the continent. In the most recent decade from 2011 to 2020 alone, the top 10 African indigenous reinsurers have recorded more than USD 18.3 billion  in gross written premiums.

“African reinsurers have demonstrated expertise and capacity by supporting the insurance of many important sectors of the African economy—oil and gas, aviation and agriculture. The reinsurers have helped to establish and manage pools for key classes of business and catastrophe exposures across the continent. Indeed, the activities of African reinsurers have greatly contributed to the development and economic growth of the continent.”

He however noted that whereas they could be proud of the  reinsurance capacity and their achievements that have contributed to the level of economic development across the continent, they need to do more.

“We must strengthen our capacity to meet the demand for covers on emerging risks and to withstand external shocks which have the potential of reversing the economic growth and gains achieved in the continent,’’ he added.

Residents have been urged to embrace the Lagos State Insurance Health Scheme, popularly known as Ilera Eko Health Scheme, as it is cheaper and is government-backed.

The scheme’s Head of Business Development and Marketing, Mr. Rotimi Olatunji, stated this during the 40th Anniversary Lecture of the Rotary Club of Onigbongbo.

Olatunji, who represented the scheme’s Chief Executive Officer, described the social insurance scheme as a social safety net or plan for the state’s residents, who he advised, to take their health seriously.

He said the scheme was part of the state government’s contribution to the Universal Health Coverage (UHC) to enable the residents to get access to quality, and equitable healthcare, with minimal costs.

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He said apart from being cheaper compared to other health care delivery programmes, it is aimed at assisting the people and, more importantly, because it is being funded by the government and its partners.

He noted that recently, the government released about N300 million to support the scheme’s work for the vulnerable. Another advantage, he emphasised, is that it has no age limit to register.

Olatunji said while some Lagosians are skeptical about the programme, others who enrolled on it are benefitting, advising that they change their mindset about the scheme as it is meant for them.

President, Rotary Club, Onigbongbo, Rasaq Salau, said they were concerned about the health status of Nigerians, hence the lecture. He also advised them to take their health seriously, adding that the earlier some diseases are tackled, the better.

The National Insurance Commission (NAICOM) has been advised to do more to enable firms succeed.

A key player in the industry, who spoke on condition of anonymity, accused the commission of doing not doing enough in the last few years.

He was reacting to the recent withdrawal of licences of two companies, Niger Insurance and Standard Alliance Insurance.

He believes the two firms should have been rescued from dying long ago by the commission, noting that it is unfortunate that brands failed.

He urged the regulator to engage more supervisory personnel.

He said the commission inspects the companies, but not often, adding that they needed to do it at least twice yearly.

He said: “The bottom line is NAICOM should do more work in the area of supervision. The department in charge of supervision needs to be strengthened to properly monitor insurance companies. The aim is not to weep operators but to guide them to success. When a company is not doing well, they should know early enough and not wait until it has gone very bad before they intervene.

“The truth is, NAICOM has not being doing enough supervision in the last few years. The Central Bank of Nigeria (CBN), for instance, inspects banks a minimum of twice a year. They check what they are doing and they tell them when they are not doing it well. Our regulator needs to be beefed up. They need more staff and more qualified personnel on supervision who need to go for training on supervision. They need to expand.”

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He pointed out that the CBN have thousands of staff, doubting if NAICOM has up to 400.

“Another good example is the National Pension Commission (PenCom), which came after NAICOM. At present, PenCom is doing well. They go to the companies every quarter, four times a year to inspect them and so they cannot fail. We need to beef up NAICOM to ensure they have more qualified personnel to inspect insurance companies, broking firm and insurance entities under them.’’

Another top player corroborated the source, saying that the commission should be alive to its core mandate.

“NAICOM should do inspect the companies but not often. They need to do it at least twice in a year. Any company that is going down, there will always be mismanagement.

In order for what happened to Niger and Standard Alliance not to continue , NAICOM should carry out a forensic investigation to find out where things started to go wrong. Because if this can happen to Niger, which was the third or second largest insurance company in Nigeria, just two decades ago and now it’s down to zero, then a lot may go wrong,” he maintained.

The Deputy Director/Head, Corporate Communication and Market Development, NAICOM, Rasaaq Salami, declined to respond to the messages sent to his phone as at press time.

More than 10 years after the introduction of the Nigerian Insurance Industry Database (NIID) by the Nigeria Insurers Association (NIA), insurers are yet to capture vehicles plying the roads for the minimum third party motor insurance requirement by law, findings by The Nation has shown.

Of the 14 million vehicles on the roads, only 3.5 million are captured on the NIID as genuinely insured.

Third party motor insurance policy is one of the compulsory insurance in Nigeria. It is the minimum motor insurance cover any motor vehicle owner.

The insurance law provides that a person who fail to have this minimum requirement commits an offence and is liable on conviction to a fine of N250, 000 or imprisonment for one year or both.

The policy takes care of the damage caused by the insured to the third party’s property or vehicle, also the Third Party’s medical expenses if any, in the event of an accident, when the policyholder is at fault.

Meanwhile, NIA, the umbrella body of insurance companies in the industry, created NIID in 2010 to eliminate fake insurance certificates in the market.

The database went live in 2011 so that insurance policies obtained by motorists could be checked real time online on the internet and through dedicated hand-held devices.

But cloning and faking of insurance certificates has continued to thrive despite the establishment of the database.

The NIA, in its 2021 Annual Report & Accounts, stated that efforts were on-going to increase the number of insured vehicles, via public enlightenment campaigns and collaboration with states’agencies for enforcement of the minimum third party motor insurance requirement by law.

The insurers said the NIID is integrated with Federal and some states motor vehicle administration platforms across Nigeria for real-time verification and enforcement of motor vehicle insurance.

On marine module on the NIID, the insurers said over half a million marine policies have been uploaded in its third year of implementation.

NIA said there had been seamless integration to the Nigeria Single Window Trade Portal and it has gained the acceptance of importers and other stakeholders in the processing of importation documents via online real time data sharing between the NIID and the trade portal.

On how the sector fared last year,  NIA said the volume of business written by member companies grew from N508 billion in 2020 to about N560 billion in 2021, representing an increase of 10 per cent.

NIA said: “The insurance industry was not insulated from developments in the economic space and had its fair share of the challenges facing the larger financial market during the year under review.

“With epileptic power supply and an astronomic rise in the energy cost against the background of failing infrastructure, insurance companies had to contend with increasing cost of operations. These and other factors, including the multiplicity of taxes, contributed to affect the bottom line of insurance companies.

“Notwithstanding these challenges, the insurance industry continues to perform its statutory role of financial intermediation and business restoration.The volume of business written by member companies grew from N508 billion in 2020 to about N560 billion in 2021, representing an increase of 10 per cent.”

On industry recapitalisation, the insurers said: “The insurance industry recapitalisation, which was incepted by the National Insurance Commission in May 2019, remains unresolved due to the court cases initiated by some concerned parties.

“Although the association is not a party to the lawsuit, it is our expectation that the cases will be expeditiously dispensed with.

“We are also concerned about the uncertainty the delays have created especially amongst our critical stakeholders and we appeal to the litigants to sheathe their sword so that whatever the issues in contention are can be resolved through constructive engagement for a swift end to the matter in the interest of the insuring public and stakeholders.’’

Weakened by a pandemic that lasted more than two years, insurers are once again faced with a catastrophic risk. The Russia-Ukraine war is a second full-scale crash test for a profession exposed, in the truest sense of the word, to all the evils of the world, a report by Atlas Magazine has shown.

Atlas Magazine stated that after months of hostilities, insurers are withstanding the shock. The armed conflict does not seem to have compromised the solidity of the system. Of course, the effects of the war may vary from one insurer to another, but for the major insurance and reinsurance firms, the impact remains weak.

The report read: “Unlike the COVID-19 pandemic, which mainly affected the life and health insurance, business interruption and cancellation risks classes of business, the war in Ukraine has a particular impact on the transport class of business.

“Aviation risk professionals could, therefore, be compelled to pay between 6 and 15 billion USD to compensate the American and European renters of the 500 planes grounded on Russian tarmacs. The amount of the bill would make this event the biggest aviation loss of all time. The magnitude of the potential damage will inevitably influence the renewal of air fleets whose war risk rates could reach unprecedented heights.

“As for the marine hull and cargo insurance, it could account for losses in the range of 3 to 6 billion USD. Likewise aviation, insurers will have to increase war risk rates for all ships sailing in conflict zones. Another segment of the market affected by the events pertains to the other property damages including energy whose losses would be in the range of 5 to 7 billion USD”.

Excluding credit and cyber risk insurance which, depending on the duration of the conflict, could increase the bill, insurers and reinsurers will survive the Russia-Ukraine conflict without any major damage.

For the time being, there is only one big loser in this war, Lloyd’s of London which traditionally accounts for a large part of the transport, aviation, credit and political risk covers, the report read.

• Culled from Atlas Magazine