Experts in Nigeria’s tech 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 tech. The event was sponsored by VerifyMe Nigeria, a leading identity verification and Know-Your-Customer (KYC) technology company, in partnership with Tech Cabal, a future-focused publication that speaks to African innovation and technology in depth.
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.
He said: “Insurance penetration in Nigeria is currently at about 1%. For a population of 200 million people, we only contributed $1 billion to Gross Domestic Product (GDP) last year. South Africa, which has a third of Nigeria’s population, has a penetration of 17 percent and a GDP contribution of $50 billion. It is obvious that 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,” he added.
According to Sowho: “The Bank Verification Number and National Identification Number exercises show that in a low trust environment enforcement of regulation should be balanced with reward. 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.
“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.”
Adesanya noted that: “insurance growth lies in the emerging consumer retail economy. 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.”