Connect with us

E-Financial

Can Technology and Connectivity Disrupt Insurance?

Published

on

Kindly share this post

On my way to the Pinet eInsurance conference hosted in Lagos last week, I asked myself a question. What does insurance have to do with telecom or technology for that matter? Plenty I concluded!

According to a BusinessDay Nigeria article I recently read, the size of the insurance market in Nigeria is approximately $1.6 billion.

With about 60 insurance companies in Nigeria, 6 of which control more than 60% market share. Meaning that that 50+ companies control only tiny fragments each thereby making it a fiercely competitive arena for anyone looking to grow.

Interestingly also Nigeria is #1 in internet penetration in Africa and #8 in the world.  So with no change in the business model in decades, the only way for the other 50 smaller players to grow is either consolidation or innovation using technology.

With the boom in internet penetration and adoption of new technologies, consumer habits and enterprises are ever evolving and disrupting traditional business models across industries from logistics to hospitality.

The question is, are insurance companies keeping pace? I will give examples. Some of you may have heard of the sharing economy that is upon us, led by new age companies like AirBnB and Uber both of which are using connected technology to disrupt traditional businesses. AirBnB is only a few years old but yet already valued at over $10 billion.

All one has to do is download the app onto your smartphone and you can easily manage and own your own hotel, without the expensive overheads that go with a traditional setup. One of the major challenges AirBnB encountered at the onset was that none of the established insurance companies were willing to underwrite any kind of insurance for it.

A similar scenario played out for Uber that also struggled to get coverage for drivers and passengers when the car was being used for business vs. personal use.

Practically all the insurance companies were unwilling to innovate and capture this new market opportunity made possible by technology.

These are now multi-billion dollar corporations that were forced to plug the gaps themselves or work with insurance startups to innovative their models and fill the gap. Technology it seems is rapidly transforming consumer habits and business models at a pace that many traditional businesses, including insurance are unable or unwilling to match.

However, we must also be cognizant that change creates opportunity. Start-ups are embracing digitization and new technology to enhance their risk profiling of consumers, using new media to adapt their business models to reach and attract consumers from traditional establishments.

Connectivity is making all this possible, therefore the establishment must either modify business models for the digital age or risk going the way of the neighborhood video-store.

Telecoms like Airtel understand the role technology plays in providing insurance coverage. They have developed a product called Airtel Insurance which essentially provides life insurance in the event of death and hospital insurance in case one is admitted into a hospital for a small monthly premium.

Consumers, who subscribe to the service, must recharge a minimum of 1000 Naira every month, to receive the coverage benefit. The more you recharge, the higher the coverage limit you received. These are some of the types of innovations that enable the use of technology to touch new consumers, and we have 34 million of them for you to reach.

If you don’t disrupt, someone else is going to do it for you.

Tenu Awoonor is an international business executive with experience in both the private and public sectors. He has proven himself to be a telecommunication and turn-around specialist, specifically in mobile and financial services arena. On twitter, his handle is @TAwoonor

(L-r): Olusola Teniola, president, Association of Telecommunications Companies of Nigeria

 

 


Kindly share this post

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

Continue Reading
Comments

E-Financial

FG Makes u-Turn on Bank Account Re-Registration

Published

on

Kindly share this post

Federal government on Friday apologised for asking all account holders in financial institutions in the country to re-register their personal details.

FG makes u-Turn on Bank Account Re-Registration

Recall that the federal government had on Thursday ‎ordered that all persons holding accounts across financial institutions and insurance firms should complete and submit self-certification forms to their respective financial institutions.

The notice issued by the government to that effect read, ‎“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.‎”

The directive raised eyebrows, as account holders already possessed Bank Verification Numbers.

Following widespread condemnation that trailed the directive, the Federal Government backtracked on Friday, saying the fresh guidelin‎e was not for all Nigerians.

The government attributed the development to misinformation.

The clarification issued by the government on Friday read, ‎“We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the notice does not apply to everybody. ‎FIRS will clarify Nigerians on the objectives of the directive.”

Also on Friday, FIRS, in a statement posted on Twitter, explained that the guidelines were only for non-residents, as well as people paying tax in more than one country.

Parts of the FIRS statement read, “The Self Certification Form is basically to be administered on Reportable Persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS.

“Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.”


Kindly share this post
Continue Reading

E-Financial

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

Published

on

Kindly share this post

Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


Kindly share this post
Continue Reading

E-Financial

Buhari Okays Establishment of CBN-Led Infraco

Published

on

Kindly share this post

President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


Kindly share this post
Continue Reading

Trending