How mobile phone is driving insurance services in Nigeria

  By Martin Ekpeke As it stands, the future of insurance services in Nigeria or any other place hangs on mobile technology, with mobile devices taking the front seat for information and web access, thereby paving ways for individuals and corporate organizations to embrace it in all ramifications. With the mobile solutions, the insurance industry is extending business services to mobile subscribers puts at 146 million by the Nigerian Communications Commission (NCC), attracting new customers who need more self-service options, modernize customer service tools to increase agent and policyholder satisfaction and ultimately reach the bottom of the pyramid, who would ordinarily have no interest in insurance services.

It’s important for insurance companies to make an extra effort, think outside the box and consider how customers are using their mobile devices, and which features are mostly used on a regular basis

Globally, the number of mobile subscribers is skyrocketing and will continue to be so. This is creating a vast potential for the over 500 insurance brokers and 7,000 agents operating in the country’s insurance industry to build strong mobile strategies to cater to evolving customer demands.

In Nigeria, the shift from traditional to tech driven insurance service is taking place gradually, with some insurance specialists partnering with mobile network operators to extend the reach of their services beyond the urban areas. One of such specialists is MicroEnsure West Africa Limited, a global insurance firm that rides on mobile technology to deliver insurance services. According to the company, the mobile platform is helping to drive insurance service significantly. “Thanks to mobile technology, which is helping us significantly. We use the mobile platform for enrollment, and the numbers we reach daily, we probably wouldn’t have been able to achieve without the mobile technology,” said Titi Shodeinde, the Nigeria Country Manager in an interview in Lagos. She added that mobile technology is helping globally, especially in Africa to reach a number of people that ordinarily services would not have reached, stressing that MicroEnsure will continue to leverage on the mobile technology that is readily available to reach customers that were hitherto excluded from insurance service. MicroEnsure’s targets are people at the bottom of the pyramid. The company partnered Airtel, one of the Nigerian telecom company, and is leveraging on its physical and electronic network to reach their customers nationwide. “Airtel insurance is a product that we provide to Airtel Subscribers, When we send SMSs, distance is no longer a problem. Our messages go to all Airtel Subscribers telling them about the insurance cover which provides Life Insurance and Hospital Cash. So yes, we use technology to send our messages out there to ensure customers are able to access the information on their policy,” Shodeinde stressed further.

Insurers need to understand and quantify the effect of mobile initiatives on customer, agent relationships and business performance because despite insurers providing a wide range of mobile features for consumers, agents and brokers; interest in mobile insurance actual usage has been low

In a research report by EY, titled ‘Mobile Technology in Insurance: Performance Measurement Methodology’ the global leader in assurance, tax, transaction and advisory services said insurers have no options than to turn to mobile tech, given the limited interaction that insurers have with their customers. The report stressed that it’s important for insurance companies to make an extra effort, think outside the box and consider how customers are using their mobile devices, and which features are mostly used on a regular basis. This, the report added will determine how to attract customers to use their mobile offerings. “In the current business environment, acquiring and retaining customers necessitates engagement and ongoing dialogue. Insurers should connect with the brand, improve two-way communication and strengthen long-term relationships,”advised the report.

Ordinarily, the traditional insurance is a hard sell in Nigeria. This, Mr. Tayo Adigun, the chief executive officer of Hybrid Insurance Brokers Limited believes comes down to a system that cannot provide a minimum standard of living for its citizens, thus, people take undue advantage of everything. He said this will also hinder the adoption of mobile services. “Yes! From our end, technology is used virtually in all areas in terms of recordings and service delivery. However, in employing the best technology, you still need well trained individual to sell the products, even to the grassroot.” Selling insurance is selling trust. So, insurers need to understand and quantify the effect of mobile initiatives on customer, agent relationships and business performance because despite insurers providing a wide range of mobile features for consumers, agents and brokers; interest in mobile insurance actual usage has been low.

With increased mobile channel investments, subsequent higher adoption and customer engagement, insurers will be able to offer customers a convenient and differentiated experience in a shorter time frame

Even though there are fears that the application of mobile technology is gradually taking over some of the jobs agents and brokers do, many companies testify that the technology approach is more cost effective, fraud free and helping to build confidence among the insured. Today, about 60 percent of insurance companies in Nigeria are using one form of technology to widen their reach and deliver their products to market. Even the telcos are not left out. For instance, MTN Y’ello Cover package, in partnership with Mansard Insurance Plc. The service is part of MTN’s Y’ello Biz solution for small business-focused Y’ello Biz. It’s designed to make life insurance affordable and accessible to the average Nigerian – more specifically, those on the MTN network. Globacom, another telecommunications carrier has what the company called National Mobile Health Insurance Product to help improve access to quality health care among Nigerians. The package was developed in partnership with the National Health Insurance Scheme to provide health insurance to millions of Nigerians through their handsets. Mobile technology beyond social media will play a key role and will clearly impact the dynamics of the industry. With increased mobile channel investments, subsequent higher adoption and customer engagement, insurers will be able to offer customers a convenient and differentiated experience in a shorter time frame.