Covid-19 redefines insurance value proposition, service delivery for customers

The past year of the Covid-19 pandemic in Africa’s most populous nation, Nigeria has redefined the insurance value proposition, service delivery to customers and operational model of the underwriting companies.

A situation that was almost like the end of the world when it started here has created new opportunities for product development and innovation particularly in health insurance, disruption policies. But most importantly, also it has impacted the way product is distributed to customers.

When the Covid-19 pandemic was first reported on 27th February 2020, the first challenge faced by most insurance companies was how to develop a business continuity plan, as the lockdowns and fear of the pandemic forced offices to operate remotely.
Therefore, the big deal was how to continue without losing contact and relationship with their customers.

This development resulted in to increase in the desire for digitalisation of services to ensure continuity of product distribution, claims reporting, claims filing and claims payment.

Read Also: Inability to offer credit, insurance services is a major challenge for PSB; Fatokun

When it became obvious that the insured consumers could no longer be reached one-one as it has always been, insurance had no option but to invest in technologies that would enable them to deliver their services uninterrupted, while operating remotely.

Today, it is almost a common practice to see insurance companies comfortably do to their business transactions from remote locations, with a larger percentage of their workforce operating from home without much difficulty.

Covi-19 pandemic which some people have also described as a blessing in disguise again opened the eyes of insurers to the need for new products that take will care of business interruptions for both individuals and corporates.

The lockdown period witnessed a lot of business interruptions, event cancellations, loan failures, contract failures, rising rent debt, failure in credit facilitation and many others, which could be covered under disruption policies insurance.

Sunday Thomas, commissioner for Insurance/CEO, National Insurance Commission (NAICOM) said during an interview that considering that most losses arising from the pandemic were not adequately covered by existing insurance policies during the Coviod-19 period, it had become obvious that current insurance product offerings were not adequate to respond to emergent risks and needs of our society.

“There is, therefore, the need for a review of conventional insurance products to upscale the value proposition of the Nigerian insurance industry,” he said.
Thomas said the industry could not continue to ignore the impact of unforeseen events on individuals, businesses, and the insurance industry as a whole.
He said it was important to also state that the work-from-home trend which was gradually becoming the norm heightened the need for digitalisation in the Nigerian insurance industry.

According to him, insurance companies were now deploying technology for remote working to enable companies to expand their mode of delivery of products and services to customers.
The Covid-19 era also saw insurance companies diversifying into health care services including health travel insurance, health Management Organisations to increase access to healthcare covers for individual and householders.

“There is growing opportunity to provide healthcare for many individual and households who may have been getting healthcare from their employers, but with lots of job loss across sectors many would have to provide for themselves and their families, says Tunde Omolade of Premium Insurance Consultants.

Omolade said, “Can you imagine that somebody embarks on travel, and because of Covid-19 and lockdown he could not return at the planned time? The travel plan has been disrupted and insurance will, in turn, take care of some damages and losses incurred, he said.”

Thomas emphasising the importance of digitalisation this time around said the effective deployment of technology to facilitate operations is among the key areas NAICOM will be emphasising this year.

“Digitalisation of the insurance business is no longer an option, but an imperative which we and the operators have to work towards its actualisation.”
The regulator is also keen on pushing companies to boost their electronic marketing mechanism to be able to drive the insurance premium.

According to him, the Commission had observed that the sector’s premium dipped during the COVID-19 lockdown as many insurance companies could not drive sales electronically, charging the operators to be innovative. “Also, one of the major challenges for insurers was the inability to market/sell insurance products to consumers which, in turn, reduced the premium income.”

Thomas stated that this has necessitated the need for a robust online automated marketing and feedback system to reduce the dependence on in-person sales and marketing, stating that the suddenness of the COVID-19 pandemic imposed immense pressure on all businesses including the insurance business.
Femi Oyetunji, group managing director/CEO, Continental Reinsurance said digitalisation of insurance is the only way to go to position insurance deliver efficiently to customers.

Oyetunji said “We note that uncertainty across the world is affecting businesses everywhere, but as a catalyst for development, this crisis gives us insurers and reinsurers an opportunity to make an impact on our countries and continent.
According to him, what is encouraging is that insurers and reinsurers are optimising their operations and propelled by global technological trends and internal preparedness, will be there for their customers.