Shaping the Future of Insurance through Growth and Innovation

Sunday Chucks

The insurance landscape is undergoing a rapid evolution, driven by shifting customer expectations, technological advancements, and a growing emphasis on sustainability. As consumers become increasingly sophisticated and demanding, they are seeking insurance solutions more tailored to their individual needs, easily accessible, and priced competitively. This shift is requiring providers move away from traditional product-centric models and embrace a consumer-centric approach which prioritises value and personalisation.According to Uta Niendorf, Partner, Wavestone, “The insurance industry must quickly move away from the company-centric view of product development and placement (inside-out), which is geared exclusively to achieving internal goals. Instead, the focus must be on the customer with their requirements and expectations and on developing suitable products, services and communication strategies. The most important sources of innovation are no longer the market and competition, but the needs of the customer.”Technological advancements are reshaping the insurance landscape with digital technologies such as artificial intelligence, machine learning, and blockchain disrupting traditional models and creating new opportunities for innovation aligned to customer needs. Insurers who leverage these technologies are streamlining their operations, improving risk assessments, and most importantly, developing innovating products that meet the evolving needs of their consumers. This focus on agility, innovation, and customer satisfaction is helping the industry navigate complexities and meet new demands.Customer satisfaction is especially crucial as the industry continues to grow across markets. Allianz estimates that in 2023 “the global insurance industry grew by an impressive 7.5 per cent, the fastest rate since the pre-Global Financial Crisis (GFC) era.”

This growth is expected to maintain over the next decade with an anticipated 5.5 per cent annual growth rate. In particular, the life insurance sector is anticipated to accelerate to a 5.1 per cent annual growth, buoyed by higher interest rate. Whilst the insurance industry is experiencing significant growth globally, the market is still in its infancy in Africa. Many Africans, especially low-income earners, have limited awareness and understanding of the benefits of insurance, leading to low penetration rates except among the upper and upper middle classes. In Nigeria, less than 1 per cent of its population is estimated to have any form of insurance, despite government policies aimed at boosting coverage. However, the past few years have seen some progress, as gross premiums have gone from N326 billion in 2016 to N726.4 billion in 2022, with life insurance seeing the most growth. In fact, Nigeria’s life insurance market is the fifth largest African market with a gross written premium of $770 million. In Q4 2023, the Nigerian life insurance business witnessed significant growth, expanding by 52 per cent quarter on quarter. Consequently, its market share increased from c.35 per cent to c.39 per cent of the total premium income. Its growth can be distinctively attributed to insurers developing innovative solutions beyond premium and coverages, that speak to local nuances and needs. Through this, they are differentiating themselves in the market and building long-term sustainable relationships with their customers.Prudential Plc, a global life and health insurance and asset management leader, has been at the forefront of this push combining global expertise with local insights to drive growth and value. Renowned for its commitment to protecting lives and securing futures, Prudential has been a pioneer in the insurance industry, providing innovative solutions that meet the evolving needs of customers worldwide – including Nigeria.In 2017, Prudential made a strategic entry into the Nigerian market by partnering with Zenith Life Insurance to form Prudential Zenith Life Insurance (PZL).

This collaboration marked a new chapter for both companies, combining Prudential’s global expertise (18 million customers across 24 markets in Asia and Africa) with Zenith’s deep-rooted local presence. Over the years, PZL achieved remarkable success, expanding its market share and introducing innovative insurance products tailored to the specific needs of Nigerians.The partnership between Prudential and Zenith not only positioned PZL as a key player in Nigeria’s insurance industry but also showcased the power of combining international experience with local insight. Through its bancassurance partnership with Zenith Bank, which boasts over 400 branches and a customer base of nearly 29 million, PZL was able to reach a broad and diverse clientele, making insurance more accessible to Nigerians.Recently, Prudential PLC made a significant strategic move by acquiring full ownership of Prudential Zenith Life Insurance, marking a major milestone in its African expansion. As Emmanuel Aryee Mokobi, CEO of Prudential Africa, emphasised during the announcement, “This acquisition is a powerful testament to Prudential’s commitment to Africa, particularly Nigeria—a dynamic and thriving market with immense potential for growth.” The acquisition is strengthening Prudential Zenith’s position in the market, enabling the company to better address the growing insurance needs of the country’s vast population, which exceeds 218 million, making it a central pillar of Prudential’s African growth strategy.

Expanding on its growth strategy to realise the potential of its Nigerian operations and thereby creating long-term value for its stakeholders, the company stated that it will be focusing on implementing initiatives in areas such as customer, technology-powered distribution and health. PZL’s investment in digital transformation aligns with broader industry trends, where automation, data-driven insights, and customer-centric platforms are reshaping the landscape. By embracing these technologies, the company will help bridge the protection gap in Nigeria, where insurance adoption remains relatively low.In Africa, Prudential’s performance has been robust with notable achievements.

This includes strong HY 24 performances with a significant increase in both new business premiums (NBP +25% YoY) and the value of new business written compared to the previous year (APE +16% YoY). This success is a result of not only its extensive bancassurance partnerships and its multi-channel distribution platform, but also in its unwavering commitment to putting customers at the heart of its business. From investing in financial literacy programs educating customers on the importance of life insurance and financial planning, to supporting healthcare access in underserved communities and youth education programs, these initiatives are reflective of Prudential Zenith’s broader goal: to help generations of families get the most out of life. This is further supported by its introduction of AI-powered solutions and advanced data analytics to its operations, ensuring that its offerings are tailored to individual needs.Prudential Zenith is showing that its role in the insurance industry extends beyond providing financial security.

The company is actively shaping the future of insurance through its investments in innovation, its customer-first approach, and its commitment to improving the lives of its host communities. As the company continues to grow and evolve, its vision for the future remains clear: to provide innovative, customer-centric, and sustainable insurance solutions that meet the changing needs of the modern world. By staying true to this ambition, Prudential Zenith is poised to lead the insurance industry into a new era of growth, resilience, and positive social impact.