• Wednesday, June 12, 2024
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Why Nigerian insurers may need to consider expert advice for counterparts in East Africa

insurance policy

A recent study by Deloitte themed ‘Insurance Outlook Report 2019/2020 on East African Insurers has revealed that why growth trend between them and Nigeria may be different, customer expectation with developments in technology is the same.

The report further suggests that insurers will need to restrategise by adopting technology to serve customers or face fierce competition and eventually go out of relevance.

The report which covered Kenya, Tanzania and Uganda, observed that insurers in the region have experienced better times than their financial performance in the recent years. The sustained economic growth in the region has not translated into a positive trajectory for insurers.

According to the report, the operating environment has only become more competitive with premium rates being revised downwards in the more competitive business classes. “Suboptimal investment returns on property and equity markets, which have been used as a safety net to compensate for underwriting losses, have further driven down the fortunes of insurance companies.”

Furthermore, the pace at which disruptive technologies have been taken up by incumbents and the entrance of non-traditional insurers in the market, is slower than expected, the report stated.

On the expert advice, it noted that insurers need to look at ways of remaining relevant in the competitive scene while improving their operational efficiencies using technology.

“Customers are becoming more enlightened, aware of their insurance needs, and are increasingly being skeptical of what insurers have to offer them.

Globally, insurers have taken steps to modify their product and service offerings in line with customer behaviours, though the trend is yet to be experienced in the East African Region.

“The first insurers, who capitalise on the opportunities that digitisation and automation offer, will most likely be the biggest beneficiaries. It is up to insurers to start small without fearing to fail and make iterative changes to their business as usual approaches.”