By Ugo Aliogo
Experts in Nigeria’s technology and insurance sectors have called for a policy mandate to make digital identity compulsory for insurance.
This was the highlight of the second edition of Digital Identity Matters, a thought leadership webinar series for driving conversations on contemporary issues in identity technology.
The event was organised by VerifyMe Nigeria, in partnership with Tech Cabal.
Speaking on the theme: ‘Why Insurance is Important for the Growth of Nigeria’s Digital Economy,’ Aguele disclosed that the Nigerian insurance market has a $100 billion potential and can become one of the biggest sources for internally generated revenue if properly harnessed.
Aguele also stated that insurance penetration in Nigeria is currently at about 1%, adding that for a population of 200 million people, contribution is only $1 billion to Gross Domestic Product (GDP) in 2020.
He further explained that South Africa, has a third of Nigeria’s population, with a penetration rate of 17% and a GDP contribution of $50 billion.
He urged stakeholders must put in efforts to ensure that insurance is available to more people to grow the digital economy.
“For a company like VerifyMe, we have the technology and APIs, but there needs to be strong regulation to close the credibility gap in the insurance market and drive compliance, even with the 1% who are insured. For instance, we need regulation to ensure that the right ID is matched to the right product. For vehicle insurance, we have to ensure that all motorists have proper insurance and driver’s licenses. This will expedite the adoption of data-as-a-product solutions that use ticketing scores to set insurance premiums. These are some of the mandatory regulations that can be put in place while we continue to work on the economic issues that will change cultural perceptions to grow the market much bigger.”
The Chief Executive Officer, Thrive Agric, Adia Sowho, remarked that the Bank Verification Number (BVN) and National Identification Number (NIN) exercises revealed that in a low trust environment enforcement of regulation should be balanced with reward.
She hinted that to drive mass-market adoption in Nigeria, consumers must be nurtured to see how insurance can work for them daily to protect their wealth, in whatever form that manifests in their lives.
She added: “We can start with assurance, a more structured ajò model and as trust is built at that level, people can be up-levelled to more elitist products. As long as we focus on the elitist end of the story, it will be challenging to achieve mass adoption.”
The Chief Digital Officer, AXA Mansard, Bayo Adesanya noted that insurance growth lies in the emerging consumer retail economy.
Continuing, he said: “However, most existing products do not cater to this class, so product design needs to be re-imagined to bring affordable, desirable and cheaply consumed alternatives to market. Digital adoption is also the most viable way to dispense these products as you cannot take paper and other literacy-oriented equipment to remote areas where utilization will be ineffective.”