Artificial Intelligence (AI) adoption by underwriters and pension fund operators will trigger a huge leap in insurance and pension penetration in the country, experts.
Currently, insurance penetration is at 0.4 per cent while about 10.2 million workers have subscribed to the Contributory Pension Scheme (CPS) in a country of over 200 million people.
While experts, who spoke at the 8th BusinessToday Annual Conference in Victoria Island, Lagos, yesterday, applauded operators and regulators of both sectors for achievement recorded in recent times, they felt this is mere scratching the surface compared to what the industry can pool with AI adoption.
The Theme Paper Presenter who is the managing director/CEO of Cowry Asset Limited, Johnson Chukwu, disclosed that, the uncovered market in both pension and insurance sectors show opportunities, especially, in the mass market where it costs more to cover.
According to him, AI is a simulation of human intelligence into a machine format such that the machine can do things that are routine in nature, faster.
Disclosing that the global average of insurance penetration is about 7 per cent, he said, Nigeria is far behind with its 0.4 per cent even as it also shows there is room for growth.
Using Access Bank as a case study, he said, the bank’s Assets andProfitability far outweighs that of the entire insurance industry last year, believing the industry can get to that level in few years to come with the adoption of artificial intelligence, saying, it remains a compass for organisations to achieve their objectives.
He stressed that, with this technology, the negative reservations that most Nigerians have about insurance and claims payments will be wiped out as it makes insurance policy subscription and claims payments seamless and faster.
The Nigerian Insurance industry, according to Chukwu, will benefit greatly by adopting AI as it will improve their customers’ experience, engender confidence and trust, improve service quality and reduce costs, adding that, AI holds the promise of transforming the traditional insurance landscape by addressing critical challenges, disrupting existing norms, and optimising risk management processes.
On how AI can transform the pension industry, he said, AI can be deployed to support Pension service provision to this mass market given the relative uniformity of their needs, noting that, AI can easily identify unusual patterns and deviations from norm and consequently flag it for management attention.
Saying, it would enhance service efficiency, he stressed that, decrease in cycle would leads to faster execution, improved accuracy, detailed data capture flexibility & scalability, improved productivity and reduced operational costs.
“With AI, you can settle claims within some hours or days on motor insurance. No doubt, AI will help in improving claims settlement. AI can harvest records of the insured in terms of making claims, which will enhance accurate pricing of policy and for the insured,” he said.
For Customer Service, he pointed out that, AI tools such as chatbots, a virtual assistant, can help to improve customer experience, saying, Chatbots are available 24/7 to give basic advice, check billing information, and address common inquiries and transactions, as it can be deployed to recapture customers’ data more effectively, even as it can more effectively analysis investment portfolios and recommend necessary actions such as sell, buy, hold, among others.
Advancement in AI, he noted, is underpinned by the drive for convenience and efficiency, which are the two most important competitive tools in the business World, stating that, businesses and industries that want to remain relevant in the economic ecosystem will therefore need to embrace AI as an integral party of their business DNA
Micro-insurance and micro pensions are a mass market. AI will cut the cost of selling insurance for underwriters and pension for the Pension Fund Administrators (PFAs) as it will improve customers experience, reduce cost, engender confidence in both industries. It is obvious the Nigerian insurance industry needs disruption through AI, he emphasised.
Earlier, the president, Chartered Insurance Institute of Nigeria(CIIN), Edwin Igbiti, said, growing the insurance industry will require that the nation’s economy be derisk, while seeking partnership with government and other stakeholders to deepen insurance penetration.
He submitted that AI will increase insurance premium growth, enhance service delivery and ensure the insurance sector contributes more to the nation’s Gross Domestic Product(GDP).
The conference chairman who is the chairman of NEM Insurance Plc, Tope Smart, was unhappy with the level of insurance penetration in Nigeria when benchmarked with the Global penetration, noting that a lot of factors were responsible for this.
He said, lack or low enforcement is affecting the adoption of compulsory insurances even as the industry is working assiduously to partner agencies responsible for enforcement so as to increase insurance adoption.
“It is quite saddening that out of a population of 200 million, only about 3 million people are actually insured. Lack of enforcement is a challenge but the industry is working round the clock to increase enforcement through the regulatory and enforcement bodies.
“Consumers’ apathy due to bad experience they have had in the past, is affecting policy renewals but I can assure Nigerians that there are various complaint avenues for people to lodge complaints. If your legitimate claims are not settled, you can approach NIA and NAICOM, and if your complaints are genuine, they will be definitely resolved,” he assured.
Earlier, the managing editor, BusinessToday Communication Limited, Mrs. Nkechi Naeche-Esezobor, while delivering her Welcome Address, noted that, the theme of this year’s Conference, ‘The World Of AI: How Insurance And Pension Sectors Can Explore Opportunities For Market Penetration,’ provided opportunities to deliberate and fashioned out strategies that both the insurance and pension sectors can deploy to enhance consumer value and service delivery, as well as further deepen market penetration. Stating that Nigeria’s insurance industry hit N1 trillion premium income target last year, which is a milestone, she added that this feat is expected to rise faster with the right technology, including AI.
AI is transforming the insurance industry, especially, in underwriting, customer support, advertising, claims, and fraud prevention, she said.