The just concluded Africa Insurance Organization (AIO) Conference held in Lagos Nigeria brought into sharp focus Nigeria’s insurance industry and the inherent challenges curtailing it growth. The industry, currently in the midst of dealing with the fallback from the COVID-19 pandemic and the #EndSars protests recorded a negative 15.3% growth in 2020 according to the National Bureau of Statistics. Despite all these, the industry still shows great promise for the great hidden potential yet to be unlocked.

Nigeria is the largest African economy with a GDP of 443 billion USD (2020) and the most populous African country with over 200million people (2020). Speaking at the AIO event, the CEO of Standard Bank Group Mr. Yinka Sani pointed to this saying “…the strength of Nigeria is its large population when it begins to pump and move.” Unfortunately, according to Mr. Sani, the Nigeria insurance industry only contributes about 8.6% to the financial sector and less than 1% to overall Nigerian economy leaving great room for growth.

The Nigerian insurance industry is currently plagued by a number of challenges including; inappropriate pricing and risk profiling, poor product-market fit, cumbersome claims processing, inadequate distribution channels and low public confidence, poor consumer awareness and regulatory pressure.

Prior to the COVID-19 pandemic, the industry players were already exploring a range of options to help mitigate against these challenges. The regulator, the National Insurance Commission (NAICOM) in 2019 reviewed and increased the capital requirements for various classes of insurers in Nigeria. This was part of its on-going industry reform efforts to help to restore public confidence in the industry and boost international competitiveness of local operators thus shape the future and development of the Nigerian insurance industry.

Besides the regulators, leading Nigerian insurers were already rethinking their processes and business models. Faced with a changing global business environment and evolving customer preferences and seeking to enable efficiency and cost savings many sort to adjust their investments priorities towards critical technologies and refocus their efforts toward transforming or modernizing their core technology systems.

A year and a half into the pandemic, these technology leaders have emerged with better results making the possession of core technology systems a great differentiator between those who were able to ride-the-wave of the pandemic and those who are still struggling. According to Accenture, digitally mature organization were able to cope with the challenges triggered by the pandemic. They were “better able to navigate change and perform significantly better financially as compared to the businesses without a cohesive digital strategy.”

Modern core technology platforms are the foundations of digital maturity and the answer to unlocking the hidden potential of Nigeria’s insurance industry. Such platforms have the inbuilt scalability, resilience and adaptability that enables insurers to not only survive but even thrive during disruptive times as we are currently in. A strong foundation enables insurers to quickly adapt and continue delivering insurance solutions including instant policy underwriting and faster claims processing that build customer confidence and loyalty.

Modern core platforms like TurnQuest Insurance Suite support the critical core operational functions of an insurance business forming the foundation for new technology integration that enable deeper customer and market insights and faster speed-to-market for products. Insurers are also able to go further in leveraging new technologies and tools like APIs, digital platforms, cloud computing and cyber security tools that have become so critical in this post-pandemic ‘new normal’ era.

In his speech to the AIO delegates, Mr. Sani advised insurers to integrate new technology into their value chain including product design, underwriting, pricing, marketing, distribution, policy and claims management to help transform the industry. The industry will be able to realize its immeasurable efficiency gains through lowered cost of doing business and affordable products thus adequately contributing to the country’s development and growth while improving the lives of its people.