AIICO Insurance Plc has lamented the low insurance penetration in the country, but advocates increased digital sales of insurance products and services to close the huge gap.
According to the company, Nigeria with over 200 million people only has an insurance penetration rate of 0.5 percent.
Speaking on the development at the annual training for members of Nigerian Association of Insurance and Pension Editors (NAIPE) sponsored by AIICO Insurance in Lagos, AIICO stated that the major mechanism in closing this gap is digital sales of insurance products.
Mr. Olusanjo Shodimu, Chief Digital & Innovation Officer (CDIO), AIICO Insurance, speaking at the training said that insurance should be sold through channels that are ubiquitous and accessible to prospects.
According to him, “Nigeria, which is the largest African economy with a GDP of 440 billion USD (2021) and the most populous African country with over 200 million people only has an insurance penetration rate of 0.5 percent.
“The major mechanism in closing this gap is digital sales of insurance products. Insurance should be sold through channels that are ubiquitous and accessible to prospects. The adult population is either on social media or surfing the web and they use their mobile phones to perform these activities.”
He listed challenges affecting insurance distribution to include trust, stating that people do not believe in insurance and the need for it except for the statutory ones imposed by the government.
Another challenge is awareness due to lack of understanding and appreciation of the importance/benefits of insurance. Accessibility is also a challenge as the requirements for obtaining insurance policies are too many and challenging.
Another challenge, he stated, is complexity as insurance policies can be complex, with legal jargon and intricate terms and conditions. This complexity can deter potential customers from purchasing insurance.
Shodimu said that to address these challenges, AIICO Insurance developed Flexure as a flexible insurance platform for the ease of distribution of insurance products and services leveraging technology.
He said: “Flexure is AIICO’s response to the changing landscape of insurance + technology “InsurTech”.
“Flexure, (an acronym for “Flexible Insurance”), is a flexible insurance platform that is enabling fast and easy access to insurance services via an Application Programming Interface (API)-driven distribution framework and is currently in use by various industry verticals.
“The Flexure platform and API technology powers both B2B and B2C offerings, providing a differentiated customer experience and API-led product distribution that allows businesses to distribute insurance products as ancillary services and allows start-ups/Insurtechs to innovate and power new, market leading use cases for insurance distribution, as well as direct access to insurance products for consumers.”
He said that the key feature of the Flexure is that it enables fast and easy access to insurance services.
Another feature is simplicity as the Flexure streamlines the often complex and time-consuming process of obtaining insurance coverage. Users can access insurance services quickly and efficiently, reducing the traditional bureaucratic hurdles associated with insurance applications.
For real-time access, he said that with Flexure, users can access insurance services in real-time. This is a departure from traditional insurance processes that might involve delays due to manual underwriting and administrative procedures. Real-time access ensures timely coverage when it’s needed most.
On customizable solutions, he said that Flexure offers customizable insurance solutions. This means that users can tailor insurance plans to their specific requirements. Whether it’s adjusting coverage limits, selecting different policy options, or modifying terms, Flexure empowers users to create insurance plans that align with their individual or business needs.
On scalability, he said that Flexure is designed to be scalable. This means that it can accommodate growing needs and user volumes without compromising performance. Whether a business is small, medium-sized, or large, Flexure can adapt to its scale.
On enhanced security, he said that security is paramount in insurance, and Flexure prioritizes this aspect. It employs robust security measures to protect user data, financial transactions, and sensitive information, ensuring that users can trust the platform with their insurance needs.