KEYNOTE ADDRESS BY THE COMMISSIONER FOR INSURANCE, MR. OLUSEGUN AYO OMOSEHIN, AT THE INSURANCE MEETS TECH (IMT) 2024, HELD ON 27th SEPTEMBER 2024 AT BALMORAL EVENT CENTRE, VICTORIA ISLAND – LAGOS.
I am delighted to be in your midst this morning on the occasion of the 2024 IMT Conference organised by Modion Communications. I commend the organizers of this conference for convening experts in insurance and technology to explore innovative partnerships, driving the development of a vibrant Nigerian insurance sector capable of supporting the nation’s projected One Trillion Dollar Economy and meeting risk management expectations. Whilst my assignment here this morning is to present a Keynote Address on the theme “Revitalising the Insurance Industry to Risk-Manage Nigeria’s One-Trillion-Dollar Economic Aspiration” – it is pertinent to reiterate that the Commission plays a vital role in fostering innovative business solutions that address pressing economic and social issues in Nigeria’s insurance sector. This commitment extends to ensuring prompt settlement of legitimate claims, promoting market growth through innovation, and driving commercial value within the industry. In achieving this objective of revitalising the insurance industry, we must of necessity address the following fundamental issues plaguing the sector, which include among others;
- Low Insurance Penetration:
- Lack of public trust
- Market Fragmentation
- Regulatory Reforms
- Digital Transformation and adaptation
For instance, while the surge of COVID-19 raged in year 2020-2021 threatening global safety and testing the abilities, resilience and preparedness of nations globally to deal with the unexpected outbreak, the pandemic highlighted the need for digitalization.
In the insurance sector for instance, while lockdowns negatively impacted traditional distribution channels, they also encouraged insurers to develop digital offerings. This has come to show that investing in technology, online platforms, and mobile apps can improve customer experience and accessibility. Essentially, revitalising the Nigerian insurance industry to risk-manage Nigeria’s One Trillion Dollar Economy literally speaks to the insurance industry’s readiness and preparedness to de-risk the activities that is projected to galvanize productivity, Innovations, economic growth and development. With the rapid changes in technology and economic/business environment, this discuss is not just timely but also topical to reawaken the need for our dear industry to rise up to the current realities of what is expected of us as an industry.
This will lead us ask the question; are we where we should be as an Industry? And your answers may definitely not be different from mine – No. A further question will now be; how do we intend to get to where we should be?
First, upon the assumption of office of the current Management, we recognised the urgent need to strategically reposition the insurance industry and place high priority in certain areas that will potentially stimulate the transformation agenda of the insurance sector.
As a Commission, we have set out 5 priority areas for immediate implementation which include; – safeguarding policyholders and improving confidence in the industry, – strengthening our supervisory capabilities and organisational effectiveness, – Improving safety and soundness of the Nigerian insurance industry, – fostering innovation and sustainability of the Nigerian insurance industry, and – enhancing overall insurance accessibility and penetration in Nigeria.
In furtherance of the need to address the fundamental question of how to attain our intended goals, we are resolved to place high priority to settlement of genuine claims as that is the fundamental reason of our existence as an industry.
One of the enshrined and fundamental responsibilities of the Commission as a regulator is the protection of policyholders, hence the Commission prioritised prompt settlement of all genuine claims, fair treatment of policyholders and utmost transparency as some of the ways to boost insurance industry’s image and support economic growth.
The post COVID-19 era witnessed a paradigm shift in business operations, driven by unprecedented disruptions that necessitated innovative adjustments to ensure continuity and resilience. This has led to the widespread adoption of AI and other emerging technologies, catalyzing fierce innovative competition and impacts, product development, service delivery, distribution networks and operations.
As a result, organizations are leveraging technology to drive growth, improve efficiency, and stay competitive in an increasingly complex landscape. It is worthy to state that the increasing momentum of Insurtech development poses both opportunities and challenges for established industry players. To remain competitive, it is crucial that we proactively incorporate innovative Insurtech solutions that will change our conventional business models, thereby safeguarding our continued relevance in addressing customer needs and market position.
The Commission had since understood this reality and issued the Regulatory Sandbox Guideline to accommodate the testing and refinement of innovative products. Consequently, we established a Directorate for Innovation and Regulation, recognising that change requires new approaches. The Commission has also completed a draft Insurtech Operation Guidelines which shall be released very soon.
The current realities of economic instability, climate change, rapid technological advancement, changing behaviour of consumers, soaring inflation and forex instability on global financial markets have disrupted ways financial services are carried out. Hence, we must imbibe technology in order for us to have a one-stop shop for insurance products and services. Innovation and sustainability are some of the major emerging issues today.
The insurance sector must embrace innovation to meet up with the rapid market changes, changes in consumers’ preferences, tastes and lifestyle. We must develop products that meets the demands of our market as innovation have taken the driving force in the financial services sector.
More critical to the theme is the issue of financial soundness and stability of insurance institutions, as a strong financial base is key to our success as an industry. Having sufficient capital that is commensurate to the Risk of an insurer has become inevitable if the industry is to meet up with up with the consequential effect of a growing economy, managing a one trillion economy and compete with our counterparts across the globe in management of risks.
As I recently mentioned in my address to professionals in the industry, to achieve the aforementioned the insurance industry must develop a wide range of new skill sets and orientation, attract and retain talents, diversify our products spectrum, improve our adaptability and agility, improve on transparency and openness, and importantly, invest in technology. These and many more factors are to be considered if we must de-risk the economy.
In conclusion, it is critical to note that navigating the current macro-economic realities successfully would be a natural precursor and building blocks for the revitalisation of the insurance industry in and this must of necessity prioritise;
- Inflation Impact: This has been a major concern for the insurance sector. Rising prices affect both insurers and policyholders. For insurance companies, it can make it difficult to operate profitably, especially if claims costs increase due to inflation. To mitigate this, insurers must carefully manage their investment portfolios, adapt pricing strategies, and maintain adequate reserves.
- Digitalisation and Adaptation: The need to embrace digitalization is critical. Insurers must modernize their processes, enhance customer experiences through digital channels, and invest in technology to streamline operations. Adapting to changing consumer behaviours and preferences is equally important. Offering online policy purchase, claims processing, and customer service can attract tech-savvy customers.
Distinguished ladies and gentlemen, I am optimistic and look forward to the outcomes of this conference, as we collectively advance the course towards revitalising the Insurance Industry to risk-manage Nigeria’s one-trillion-dollar economic.
I wish you a successful Conference and fruitful deliberations to birth a digitalised industry for the betterment of all.
Thank you
Olusegun Ayo Omosehin, FIIN
