By Henry Uche [email protected]
Captains in insurance and pension sectors have adopted clean data and Artificial Intelligence (AI) technology as accelerators and stimulators for the industry given the enormous benefits to the business world.
These experts equally believe that with Clean data and AI, the industry would even surpass the N1 trillion premium income attained by the insurance sector in the fourth quarter (Q4) of 2023. This , they said, even as they predicted that the sector has the prospect to maintain an annual cumulative average growth rate (CAGR) of 15 per cent in 2024.
During a panel session at the 8th national conference of BusinessToday, held in Lagos recently, industry experts maintained that the slow rate of insurance and pension penetration in Nigeria was because insurers and pension fund Operators have been relying on manual operations of data management which has been ineffective resulting in low productivity.
While advocating the use of clean data and adoption of Artificial Intelligence (AI) to stimulate growth in the two sectors, they also advised Insurers and Pension Fund Operators that though adopting AI in their operations is key; however, they should be conscious of issues of data protection/security and privacy.
Drawn from different segments of the value chain, they urged insurance and pension fund operators to take advantage of data available in silos across different platforms for the use of the sectors.
Speaking during the panel discussion, the Executive Director/COO, Heirs Life, Tosin Bayo Yusuf, harped on the importance of clean data for the growth of the two sectors.
“Data is key, there is need to have clean data. The data that the two sectors have generated manually over time are still useful. These data can be processed by data experts and thereafter, would be ready for use. For instance, just like in advanced countries, if you have a history of lodging claims, the premium you pay at the next renewal would be higher than others, but they are able to do that with AI. So, with artificial intelligence, risk would be appropriately priced,” she pointed out.
In her contribution, Pension Consultant, Idu Okwuosa-Okeahialam, listed the advantages of AI for the both industry.
She said AI has the ability to limit or mitigate risk occurrence, enhances insurance and pension penetration and competitiveness, breeds efficiency and cost reduction, “AI remains the only medium to get the millennials on insurance platform”
Contributing, the Managing Director/CEO, Guinea Insurance Plc, Ademola Abidogun, said, in as much as artificial intelligence is good for promotion of insurance and pension businesses, the challenge lies in data protection.
“AI helps profile customers and assist in carving out product that suits the needs of each customer, relying on their data to know what each customer wants at any point in time.
“Yet, as good as AI is, there are issues of data protection and privacy. This is critical so that sensitive information about a customer is not abused by data harvesters, thereby, tramping on his or her privacy.
“There should be regulation on data that can be harvested for use and on some sensitive information, there should be consent before those information can be used. Stakeholders should come together to address this, especially, in the era of cyber crime and attacks,” he stated.
More so during the panel session, the founder, Hankali Intel, Mr. Mgbame Michael, disclosed that there are data available in silos across different platforms.
He urged insurance and pension operators to harvest these data for the use of the sectors, saying, this will stimulate huge growth in adoption and penetration of insurance and pension products.
For the Chairman of NEM Insurance Plc, Tope Smart, who doubles as the Chairman of the occasion, said he sees AI as a game changer in both insurance and pension sectors.
“With AI, we can achieve a lot and intervene in several areas which will include customer satisfaction, engagement, risk management and assessment. In pension, there would upgrades in the service of retirement benefits, life expectancy and an avalanche of areas. AI intervention is needed in all areas of operations.” he asseverated.
Speaking, the regulatory body for insurance, National Insurance Commission (NAICOM) was one among others who acknowledged AI is the future of insurance business in Nigeria. The Commissioner for Insurance/CEO of NAICOM, Mr Sunday Olorundare Thomas, confirmed this in a keynote address at the confab.
Represented at the confab by the Deputy Director, Lagos Office of NAICOM, Mr. Ajibola Olabisi Bankole, Mr. Thomas encouraged insurance operators to increase adoption of AI as it offers better productivity, boost profitability, increase customer experience, while ensuring quick service delivery and claims payment to insurance policyholders.
The Commissioner maintained that technology adoption is part of the 10-year strategic roadmap of the insurance industry, saying, “NAICOM, as a regulator, will continue to evolve policies that will engender the growth of the industry, increase penetration and contribution to nation’s Gross Domestic Product (GDP)” .
Corroborating NAICON helmsman, the Chief Executive Officer of Cowry Asset Management Ltd, Mr Johnson Chukwu, stressed that strong regulation and increase in naira value would drive insurance industry performance.
According to him, AI would help improve insurance performance particularly in risk assessment and management, claims processing, growing micro insurance among other benefits.
On pension side, Chukwu equally affirmed that strong regulatory supervision from PenCom like compliance from Private Sector Employers to the Contribution Pension Scheme (CPS); strict adherence by PFAs in the payment of pension and lump sum to retirees; regular review of regulatory investment guidelines in tandem with economic dynamics; regular provision of information and education to RSA holders by PFAs, and strong Investment returns.
“The Nigerian Insurance will benefit greatly by adopting Al as it will improve their customers’ experience, engender confidence and trust, improve service quality and reduce costs.
“Al holds the promise of transforming the traditional insurance landscape by addressing critical challenges, disrupting existing norms, and optimizing risk management processes”.
He added that AI can be deployed to improve pension industry growth in management of Micro Pension, and to support Pension service provision to this mass market given the relative uniformity of their needs.
AI, he posted can help in fraud detection. “With Al, one can easily identify unusual patterns and deviations from norm and consequently flag it for management attention. It can also aid service efficiency; decrease in cycle time which leads to faster execution, improved accuracy, detailed data capture flexibility and scalability, improved productivity and reduced operational costs.
“Customer Service experience could be improved with Al tools such as chatbots, a virtual assistant. Chatbots are available 24/7 to give basic advice, check billing information, and address common inquiries and transactions” .
He added that Al can be deployed to recapture customers data more effectively, as well as deployed to carry out Investment Portfolio Analysis, and recommend necessary actions such as sell, buy, hold, lease, etc.
“Al can be deployed to track customers complaints and ensure that they are effectively addressed. Advancement in Al is underpinned by the drive for convenience and efficiency, which are the two most important competitive tools in the business World.
“Businesses and industries that want to remain relevant in the economic ecosystem will therefore need to embrace Al as an integral party of its business DNA,” he asserted.
Earlier in her welcome address, the convener, mrs Nkechi Naeche- Esezobor,
pointed out that the theme was painstakingly chosen given the speed of AI in accelerating virtually every human endeavor.
Naeche- Esezobor admonished players to fashion out strategies to harness the inherent benefits of AI to enhance consumer value, service delivery, as well as further deepen market penetration. “AI is transforming insurance industry in the area of underwriting, customer support, advertising, claims, and fraud prevention in the insurance industry.
“In pension industry, just by simply automating various aspects of pension management from data analysis to investment decision-making, AI minimizes the need for extensive human intervention. These savings can then be passed on to pension holders, enhancing their overall returns,” she added.