Experts call for grassroots transformation, digital inclusion in insurance sector
Agwunobi Joy
As Nigeria’s insurance sector continues to grapple with low market penetration, industry stakeholders are advocating for a radical shift, one that moves beyond the confines of boardroom deliberations to engage the everyday Nigerian.
At a recent industry forum, experts highlighted the need to simplify insurance products, harmonise operations, and harness digital innovation to build a resilient, inclusive future for the sector.
Aminu Tukur, Vice Chairman of Noor Takaful Insurance, speaking on the theme “Resilience and Growth: Identifying the Alternatives in Insurance,” stressed that deep-rooted religious beliefs often shape Nigerians’ risk management behaviours. “We are religious people. Many believe that faith alone can shield us from misfortune,” he said. “But beyond faith, insurance is the practical safety net that has always been available.”
Tukur argued that despite the long-standing availability of insurance, it remains largely ignored, particularly among younger and lower-income Nigerians—many of whom are now more inclined toward gambling or betting than responsible risk management.
“The betting industry in Nigeria has grown exponentially and now overshadows the insurance sector in terms of size and engagement,” he revealed, referencing the ₦1.3 trillion lost to the CBEX scam as a painful example of how misdirected funds could have fortified the insurance ecosystem.
He further identified informal alternatives mechanisms that Nigerians lean on, especially among the affluent. Wealthy individuals often self-insure, choosing to replace valuable assets out-of-pocket rather than purchase insurance. “You will hear someone say, ‘Why insure a ₦100 million car? If anything happens, I will just replace it,’”Tukur noted. While this mindset may seem logical for the ultra-wealthy, he warned that even their resources have limits. “Eventually, the value of assets can outgrow personal wealth, making risk pooling through insurance not only practical but essential.”
Despite these alternatives, reflecting on the 2020 End SARS protests, Tukur commended the industry’s response in settling claims and highlighted this as a testament to its resilience. He acknowledged NAICOM’s shift toward risk-based supervision and the anticipated enactment of legislation to strengthen capital adequacy frameworks across insurers.
“NAICOM is working hard to ensure that every insurer maintains sufficient capital reserves to absorb economic shocks,” he said,highlighting the challenges posed by the current economic climate and the necessity for the industry to prepare for resilience.
Tukur argued that alternatives are necessary because conventional insurance has not fully reached the grassroots, with the industry historically focusing on corporate clients. He drew a parallel with the banking sector’s initial oversight of fintech, which has now gained significant traction at the grassroots level,warning that insurers risk missing out on the vast informal market if they do not adapt.
“We are too focused on servicing the Dangotes, the BUAs, and multinationals, we have neglected the mass market. Meanwhile, platforms like OPay and Moniepoint are thriving because they serve the people at the bottom of the pyramid.”
He praised the success of fintech companies in bridging the gap between financial services and underserved communities. “Look at the valuations of fintechs like Opay, Moniepoint, and Palmpay. See how many POS terminals they have, these platforms are thriving where traditional banks are not,” Tukur noted, adding “the same approach must apply to insurance—we must go grassroots.”
He also pointed to a trust deficit stemming from some claims officers’ predisposition to view claims as fraudulent. Additionally, he noted religious sensitivities and the perceived high cost of insurance as factors influencing the adoption of conventional insurance.
He urged the industry not to underestimate the role of insurtech. “The same way traditional banks once ignored fintechs and are now playing catch-up—we risk losing relevance if we don’t embrace and partner with these digital innovators. They are not competition, they are collaborators.”
Adebowale Banjo, the CEO and co-founder of MyCover.ai, emphasised the importance of simplifying insurance products while ensuring they remain effective in underwriting risk. He pointed out the gap in understanding between insurance practitioners and the average Nigerian consumer, stating: “The average Nigerian does not understand insurance like a practitioner does.We throw around technical jargon that confuses and alienates consumers.”
He highlighted the problem of using complicated jargon and terminology that many people find hard to understand. Banjo shared some real-life examples to illustrate these issues. One of the challenges he mentioned was auto insurance, particularly the concept of deductibles.
“For instance, when a customer who has just purchased car insurance faces a claim of 500,000 Naira, but the insurance company only offers 450,000 Naira, the customer is left puzzled and frustrated. The insurer’s explanation of the deductible only adds to the confusion. “What does ‘deductible’ even mean?” Banjo pointed out. This lack of transparency can lead to feelings of betrayal when the customer doesn’t understand the terms of their policy, it’s even more challenging when you did not tell him beforehand.”
He also highlighted issues with health insurance, particularly around pre-existing conditions where an individual who already has high blood pressure buys a health insurance plan, only to discover later that their condition is not covered when they need treatment. “A woman with high blood pressure buys a health plan, only to learn her condition isn’t covered. She didn’t understand the fine print, and when her claim is denied, she feels betrayed,” he said. Banjo stressed the need for transparency and education, urging insurers to explain terms in plain, relatable language.
In response to these challenges, MyCover.ai has introduced simplified product features like “excess buyback” for auto insurance to eliminate confusion. Banjo explained that while their platform is tech-driven, they prioritise human interaction in communication. “Tech is just a tool. In Nigeria, the human connection still matters,” he said, adding “That is why we go granular—speaking the customer’s language, not ours.”
Banjo also detailed the platform’s digital innovations. Rather than asking users to download a dedicated app, they launched a Progressive Web App (PWA), allowing customers to access services easily without installation barriers. “We realised early that getting people to download an insurance app was a tall order. PWAs help us reach more people, more efficiently,” he noted.
Banjo emphasised that the key to ensuring a positive customer experience is simplicity—both in the way insurance products are designed and in the digital platforms that support them. According to him, by removing the barriers of complexity, customers are more likely to engage with and trust their insurance products.
On his part, Rotimi Siwoku, head of strategy at Sunu Assurance Nigeria Plc, emphasised the need for Nigeria’s insurance sector to embrace digitisation and harmonised operational frameworks in order to achieve sustainable growth and improved customer service delivery.
Siwoku noted that while Sunu Assurances has a strong presence across Francophone countries, there are valuable lessons from those markets that can be applied locally in Nigeria to enhance performance and innovation stating “One of the strategic decisions we made in Nigeria was to deliberately leverage technology. In this market, there’s often a slower pace in scaling operations. So, we started by integrating technology in a more targeted way—first modifying it, then scaling it to support efficient underwriting and customer service.”
He explained that despite a lean workforce,the firm has been able to optimise operations by prioritising digital tools that go beyond the popular, yet often underutilised, mobile app model.
“Everyone talks about mobile apps, but the reality is that not many customers are eager to download an app unless it provides continuous value. So, we opted for a web-based platform, which proved instrumental during the EndSARS protests. Because our systems were web-based, our teams were able to transition to remote work without any disruption in service delivery.”
Building on this approach,he noted that the firm also introduced digital solutions for sales management and pre-loss vehicle inspections. Siwoku highlighted that while these innovations are still evolving, the company is learning and adapting from both internal pilots and broader market trends.
“One major issue we have identified is the fragmentation of solutions across the industry. For instance, remote vehicle inspection services are available in different forms, but there’s no harmonised framework to unify them. Regulators need to take the lead in creating a standardised, accessible ecosystem,” Siwoku noted.
He pointed to vehicle license renewals as an example where customers undergo mandatory inspections, yet the data collected is not centrally used across insurance providers. Similarly, Know Your Customer (KYC) procedures are often repeated unnecessarily when switching providers.
“Why do we need to repeat KYC every time a customer changes insurance companies? We already have national identification systems like NIN. Can’t we integrate and draw from those existing records to streamline customer onboarding?”
According to Siwoku, harmonisation across the industry would not only simplify processes but also improve customer experience and operational efficiency.
He also stressed the importance of including service providers such as loss adjusters in the digital transformation agenda. When claims arise, their timely and efficient involvement is critical to overall customer satisfaction.
“Are loss adjusters online? Are we involving service providers enough in this digital drive? These are questions we need to ask. There are many existing solutions we can tap into,” he added.
Beyond Nigeria, Sunu Assurance has gained valuable insights from its operations in Francophone markets, particularly in simplifying policy documents to improve transparency and customer understanding. Siwoku explained, “We are working on simplifying policy documentation in Nigeria, drawing inspiration from what has worked well in the Francophone region. However, the learning is mutual. While we adopt their ideas, there are Nigerian strategies that don’t necessarily work elsewhere.”
He highlighted the example of USSD technology, which has proven highly effective in Ghana—generating up to 60 per cent of the country’s insurance revenue. However, it has not seen the same success in Nigeria. “These are the small but significant insights we must continuously assess. Not all tech or market strategies work uniformly across regions, so we must remain proactive in learning and adapting,” Siwoku said.