Fintech offers more than just payments to Nigerians; fintech companies can help the insurance industry to streamline its processes and make it more efficient, writes JOSEPH INOKOTONG.
FINTECH (or financial technology) can play a big role in the growth of the insurance industry in Nigeria. Experts are unanimous in their views that for about 10 years Fintech was the poster child for the African startup ecosystem, especially in Nigeria.
Indeed, Fintech offers more than just payments to Nigerians. It provides access to insurance, credit, and pension. Insurance and credit in particular have shown a lot of potential, and as such both are reported to pose as the possible cure for Fintech’s ailment if sufficiently explored through embedded insurance.
Fintechs’ rapid growth has been banking on providing affordable financial services and products that give Nigerians easy access to finance, credit, insurance, pension, etc.
However, many socio-economic factors like the crypto crash, the government’s monetary policies, acute inflation, and neck-breaking competition within a growing niche are said to be responsible for the slow-down of the growth of Fintech in Nigeria.
Embedded insurance, for instance, helped Oze to drive growth. With Curacel Grow’s AI-powered embedded insurance infrastructure, Oze has been able to get Credit Life insurance for loan applicants in a fraction of the time it takes to negotiate with multiple insurance underwriters across Africa on their own.
Curacel Grow’s partnership has led to significant improvements in Oze’s insurance procurement process, saving time and manpower typically spent on acquiring insurance. It has been reported how Curacel partnered with Oze for streamlined and affordable credit life loan coverage.
Embedded insurance possesses enormous benefits to Fintechs. Tailored insurance products boost transaction volume and value. It also reduces concerns over product quality and service delivery as a warranty from insurance strengthens retention and conversion. Similarly, digital insurance grows brand loyalty and advocacy. Some embedded insurance offerings Fintechs can embed include but are not limited to: Job Loss Insurance, Asset Cover, Gadget Insurance, etc.
Some roles abound that Fintech can play in the growth of the insurance industry in Nigeria. For example, fintech companies can help insurance companies to streamline their processes and make them more efficient. They can also help to improve customer service and make it easier for customers to buy and manage their insurance policies. Fintech can be used to develop new insurance products that are tailored to meet the needs of specific customer segments.
Moreover, one way that fintech can help the insurance industry is through the use of data analytics. Data analytics can be used to analyze large amounts of data from a variety of sources, such as social media, online purchases, and even wearable devices. This data can be used to create more accurate risk profiles for customers, which can lead to more personalised insurance products. Data analytics can also be used to detect fraud, which can help protect insurance companies from financial losses.
Another way that fintech can help the insurance industry is through the use of blockchain technology.
Blockchain is a digital ledger that is shared among a network of computers. It is secure and transparent, and it can be used to track and verify insurance claims. This can help to speed up the claims process and reduce the amount of fraud. Blockchain can also be used to create “smart contracts” that automatically trigger insurance payouts when certain conditions are met.
Another way that fintech can help the insurance industry is through the use of artificial intelligence (AI). AI can be used to process large amounts of data, and it can even be used to predict risk and make decisions about insurance claims. This can help to reduce the amount of time and money that is spent on processing claims, and it can also help to improve customer satisfaction. AI can also be used to create chatbots that can answer customer questions and provide information about insurance policies.
Chatbots are computer programmes that can simulate conversations with users. They are often used on websites and apps, and they can be a great way to get information quickly and easily.
In the insurance industry, chatbots can be used to answer questions about policies, file claims, and even recommend products. For example, if clients wanted to know about home insurance, they could chat with a chatbot and get all the information needed.
And chatbots are just one example of how AI can be used in the insurance industry. There are also other applications, such as using machine learning to detect patterns in claims data and identify potential fraud.
Machine learning is a type of AI that can be used to detect patterns that humans might not be able to see. In the insurance industry, this can be used to detect fraudulent claims and prevent financial losses.
In summary, fintech can help the insurance industry in Nigeria in several ways, including using data analytics, blockchain, and AI. These technologies can help to speed up processes, improve customer satisfaction, and even prevent fraud.
Examining the future of fintech and the insurance industry in the country, it is not certain if these technologies will be widely adopted because some challenges need to be overcome before fintech is widely adopted in the insurance industry.
For example, there are concerns about data privacy and security, and some people might be skeptical about using AI for decision-making. However, the benefits of fintech are significant, and it is obvious that over time, more and more insurance companies will adopt these technologies.
Interestingly, there are a few financial implications to consider. First, fintech could potentially lower costs for insurance companies by automating processes and reducing the need for human labour. However, there could also be costs associated with implementing and maintaining these technologies.
Additionally, fintech could lead to a shift in the way that insurance companies price their products, which could have an impact on profits. For example, AI might be used to more accurately assess risk, leading to more tailored pricing.
The financial implications of adopting Fintech are weighty, and the insurance companies may require huge financial outlay to accomplish the mission.
Fintech adoption could require a significant investment of time and money, and some companies might not be able to make that investment. There is also the potential for disruption in the insurance industry as new technologies emerge. For example, blockchain could potentially disrupt the way that insurance is currently regulated and managed.
The financial implications of fintech harbour the potential for a shake-up in the industry, and it will be interesting to see how things play out in the coming years. One thing is certain – fintech is here to stay, and it is going to have a big impact on the insurance industry.
The biggest benefit of fintech for consumers will be increased transparency and choice. Fintech could give consumers more information about insurance products and make it easier to compare different options. This could lead to lower prices and better value for consumers. Additionally, fintech could make the process of buying and managing insurance much more convenient.
There are some specific ways that fintech could improve the insurance experience for consumers. One of the ways is through the use of mobile apps. With a mobile app, consumers could easily manage their insurance policies on the go. They could file claims, make payments, and get information about their policies with just a few taps on their phone. It could make it easier for consumers to track their health and wellness, which could potentially lead to lower premiums.
The convenience and accessibility of mobile apps could be a game-changer for the insurance industry. And that is not the only potential benefit for consumers. Fintech could also make it easier for people to access insurance products that are tailored to their individual needs. For example, some insurance companies are starting to use AI to create “micro-insurance” policies that are customised to specific risks and needs.
This type of personalised insurance could be a positive development, especially for people who have unique or specific needs that aren’t always met by traditional insurance policies.
Fintech also has the potential to increase financial inclusion. Financial inclusion is about making sure that everyone has access to the financial products and services they need to improve their lives. Fintech has the potential to make insurance more accessible to people who might not have had access to it before. For example, some fintech companies are working on creating “pay-as-you-go” insurance policies that can be purchased with small, regular payments.
and then