Insurtech has recently been receiving a lot of attention in Nigeria especially on how it can successfully penetrate and establish itself in the Nigerian market.
Insurtech is derived from ‘insurance’ and ‘technology’, mashed together and it entails using technology to offer insurance services eliminating the mundane activities involved in the insurance process.
They offer insurance coverage through online platforms, It has also made evaluating and pricing of risks, claims processing, asset management easily conducted.
Insurtech has a lot of unexploited opportunities that would benefit organizations, individuals involved, and the society at large if properly and adequately embraced by Nigerians.
Also read, Top 5 Insurtech Startups in Nigeria
Startups are emerging in the insurance industry however there’s a question that has remained salient to everyone involved, ‘does insurtech have a future in Nigeria’.
Insurance is almost a foreign word to the average Nigerian citizen as the thing at the forefront of their mind is how they will make money for meeting their basic needs and for those who can afford it, the rigorous process involved just puts them off.
Insurtech startups are indeed making efforts to unbuckle this rigorous process of getting insured and are working towards allowing potential clients to craft insurance plans that work for them from the insurtech service offerings.
However, there are still areas restricting their predicted exponential growth. Poor or weak evaluation and pricing of risks, the low adoption rate of their services, lack of readily available funds, traditional and religious beliefs also are restrictive factors.
Lack of trust is yet another reason why most are skeptical about insurtech, there were individuals due to one reason or another didn’t receive their claims from traditional insurance companies, so they share the news of their unfair treatment to all and sundry.
Another major issue is the cost and process of acquiring an operational license, it is a nerve-wracking and tedious process that most give up before they start.
After this there’s a problem of data security, most insurtech in other countries use blockchain technology to safeguard their data and Nigeria is yet to prove herself in that high-level use of blockchain technology. Therefore that remains a struggle for all involved.
In 2012, the National Financial Inclusion Strategy (NFIS) was launched to increase financial inclusion by a significant percentage before 2021. Insurance was one of the target sectors of the NFIS.
Here we are and not enough impact has been made by NFIS despite the revised NFIS in 2018. This brings us to ask the question, ‘are Nigerians ready to embrace insurance as a way of financial inclusion, and if they are, how will insurtech solve help implement this.
When these questions are answered, we can therefore say, insurtech does have a future in Nigeria.
Don’t miss important articles during the week. Subscribe to techbuild.africa weekly digest for updates.