Experts Predict Insurance Sector to Maintain 15% Annual Growth via Product Innovation, AI Adoption

Ebere Nwoji

Following the attainment of a N1 trillion premium income mark  by the insurance sector in the fourth quarter of 2023, insurance sector operators have predicted that the sector would maintain an annual cumulative average growth rate (CAGR) of 15 per cent this year.

This, they predicted would be achieved through commitment to product innovation, adoption of Artificial Intelligent (AI) technology across insurance value-chain and better customer experience through claims settlement.

The operators predicted that this would happen despite macro-economic upheavals plaguing businesses in the country pointing out that in the past five years, the insurance industry had been outperforming the Gross Domestic Product (GDP) growth rate of the economy on annual basis.

The Chairman, Nigeria Insurers Association (NIA), Mr. Olusegun Omosehin, while commenting on recent feat achieved by the sector last quarter, said the insurance sector at the close of the fourth quarter of 2023, recorded impressive growth.

He described the development as a milestone achievement and the beginning of great things that would happen in the industry despite all economic odds.

“Consistently, the insurance industry has been outperforming the GDP growth rate on an annual basis, with an annual cumulative average growth rate (CAGR) of about 15 percent in the last five years. With our commitment to product innovation, better customer experience particularly in the area of claims settlement, and technology adoption across the insurance value-chain, we can predict a better and brighter future for the industry especially in the light of the commencement of the implementation of the 10-year industry transformation strategic plan,” Omosehin said in a chat with THISDAY.

Omosehin, who is also the Managing Director, Old Mutual Insurance congratulated insurance underwriting firms who constitute the NIA members for the achievement and assured that the industry would perform better this year and in the years to come.

Also the Executive Secretary Nigeria Council of Registered Insurance Brokers (NCRIB), Mr. Tope Daramola, said it was quite heartwarming to see that the industry operators met the set target in the fourth quarter 2023 report released.

“The result is a testament to the renewed commitment of all actors in the industry to break off the cocoon of low penetration. The operators are accelerating their responsiveness in terms of product offerings and taking advantage of insures’ needs across demographic segments of the nation.

“Also, the regulatory oversight by NAICOM has been quite stringent. But since the largest room is the room of improvement, the industry still needs to do more by ensuring full implementation of the compulsory insurances, giving more attention to product creation and development, telling more of its stories in claims payments to create credibility for the industry in the eyes of potential insureds”, he advised.

The Commissioner for Insurance and NAICOM’s Chief Executive Officer, Mr. Sunday Thomas, had said operator’ adoption of AI would accelerate future premium earnings by the industry.

Thomas, had at a recent insurance forum in Lagos, urged insurance operators to adopt AI as a way of improving their product offering and distribution.

Thomas, had said he saw AI as where the future of insurance business in Nigeria lied.

He urged insurance operators to increase adoption of AI insisting that it improves service and enhances profitability. He said insurance consumers would experience another dimension in quick service delivery and claims payment if operators could adopt the technology.

Thomas, had explained that AI was captured as part of the 10-year roadmap of the insurance industry, and that NAICOM, as a regulator, would continue to evolve policies that would engender the growth of the industry, increase penetration and contribution to nation’s GDP.

NAICOM recently announced that insurance operators had in the fourth quarter 2023 met the N1 trillion annual premium income target it set for them 14 years ago describing it as a milestone.