E-Financial
Can Technology and Connectivity Disrupt Insurance?
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
Ecobank Nigeria has announced plans to phase out its Naira-denominated Mastercard debit cards, with a transition period scheduled to run from July 29 to September 29, 2025.
The bank disclosed the development in a message sent to customers on Wednesday, urging account holders to switch to a Verve debit card available free of charge.
According to the notice, the bank’s decision is part of a broader effort to enhance security and ensure smoother digital transactions for customers.
“As part of our ongoing commitment to delivering secure and efficient banking services, we will be phasing out the Ecobank Naira Mastercard,” the statement read.
“In its place, we are pleased to offer you a free Verve debit card to ensure a seamless transition.”
The bank said the Mastercard deactivation would take full effect from September 30, 2025, saying that customers are therefore advised to collect their Verve cards before the deadline to avoid service disruption.
Ecobank also assured customers that the new Verve card would support payments across several digital platforms, including Google Play, YouTube, TikTok, Spotify, Netflix, Prime Video, AliExpress, Zoom, Microsoft, LinkedIn, Starlink, Audiomack, and Uber.
“It will also remain functional for ATM withdrawals and Point-of-Sale (POS) transactions nationwide.
“To obtain the replacement card, customers are instructed to visit the nearest Ecobank branch, request the Verve debit card, and collect it at no cost,” the bank said.
The move follows a growing trend among Nigerian banks to prioritise local card schemes like Verve, which are often more cost-effective and resilient to international payment disruptions.
Central Bank of Nigeria (CBN) has dismissed claims that its recent redeployment of staff from Abuja to Lagos State was politically motivated.
Muhammad Abdullahi, deputy governor, economic policy, made this clarification known at a two-day Interactive Session on Government-Citizens Engagement in Kaduna on Wednesday.
Recall that the CBN had in 2024 rolled out its Early Exit Package (EEP).
As part of the policy, the apex bank reduced its staff strength in Abuja Headquarters.
The decision had been greeted with controversy, with some critics claiming the move was targeted at the banks’ workers from Northern Nigeria.
However, Abdullahi has clarified that the policy was not targeted at anybody.
He noted that a recommendation from the banks’ insurance provider concerning workplace safety triggered its decision to decongest its Abuja headquarters.
“It is not an agenda against anybody,” he stated.
He said, “Some of those staff members taken to Lagos and Kaduna are now so happy they don’t even want to come back to Abuja.
He also dismissed claims that CBN deliberately removed 16 directors, particularly from the Northern region.
“There are many directors from the Northern region currently serving in the bank,” he stated.
He stressed that the son of the country’s secretary to the government of the federation was also redeployed from Abuja to Lagos.
“The son of the Secretary to the Government of the Federation was also moved from Abuja to Lagos. Nobody was spared—it is a policy of the bank,” he stated.
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
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