The Digitization of Insurance and its Adoption by SMEs in Nigeria
The history of insurance in Nigeria is a long and intricate one that is intertwined with the nation’s colonial ties circa 1918.?
The existence of various pioneer insurance organizations, the disparity in industry standards, the high barrier of entry, and regulatory problems are some of the issues that made insurance puzzling to many Nigerian business owners so they avoided it.?
The merging of the internet and technology is the reason for the existence of smartphones, computers, websites, apps, and more. All of these also help to transform the average Nigerian business owner’s beliefs and experience concerning insurance.?
There has been a slow and steady adoption of insurance by small and medium enterprises (SMEs) in Nigeria over the past six years. Here are four reasons why that is happening:?
Insurtech is the combination of insurance and technology. Nigeria has seen a significant rise in the number of insurance companies that use technology to drive their premium subscription and claims payout processes through interactive websites and apps.?
Technology also lowers the barrier of entry for small businesses into the insurance market by making it seamless to purchase an insurance premium from wherever they are in the country using a smartphone or computer.?
It is the norm for organizations to have accounts on multiple social media platforms. Insurtech corporations have been leveraging this to educate SME owners about the unfair advantage that insurance gives them.?
Social media has also been used to drive the adoption of insurance premiums curated for SMEs and to resolve their customer complaints quickly without any physical interaction.?
Other strategic tactics for growth that insurtech companies are exploring via social media for SME customer acquisition and retention are strategic partnerships with online community leaders,? business-related CSRs, etc.
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Minimising cost is important to every business irrespective of its size. However, it is more crucial for SMEs that operate on minuscule budgets.?
For decades, insurance premiums for businesses were expensive and rigid, so small business owners perceived it as a costly expenditure that they did not want to incur.?
Insurtechs like Casava are revolutionizing the insurance industry with cost-effective business insurance products like Business Gro that protect SMEs from unforeseen circumstances such as flood and fire for less than N1,000 monthly while giving them access to loans and grants to scale their business.?
One of the problems that plagued the Nigerian insurance industry for decades was a high level of distrust due to illicit practices such as bogus claims payout, baiting, and more.
Nigerian insurance companies were collectively losing up to ?30 million annually to these issues whilst combating a rapidly growing apathy for insurance amongst Nigerians.?
These issues are being eradicated because the infusion of technology into insurance processes has made small business owners more receptive to the notion of adopting insurance as a risk management tool.?
SMEs can use products like Bloom by Casava on a smartphone to renew their premium subscription, file claims, and receive payments seamlessly.?
Conclusion?
There is no doubt that the digitization of the Nigerian insurance industry in Nigeria has been a major catalyst for its adoption by small and medium enterprises (SMEs).
The existence of digital products that power insurance premium subscriptions and claims payouts without human intervention, social media, interactive websites, and a lot more have enhanced the overall customer experience of SME owners seeking insurance coverage.??
Technology has also given insurtech organizations access to data that tells them the needs of SMEs at a time, affording them the flexibility to add complementary new products that cater to those needs.?
What are your thoughts about the digitization of the Nigerian insurance landscape? Kindly share them with us. ?