Random thoughts on insurance broking and IT
Ewherido, ACIIN, ACIB, is the Managing Director of Titan Insurance Brokers and can be reached on +2348132433631 or titan.insuranceng@gmail.com
Thursday, August 2, 2018, was time for the mid-year workshop of members of the Lagos Area Committee (LAC) of the Nigerian Council of Registered Insurance Brokers. Technology is changing faster than many people are changing their clothes. So it was no surprise that information technology featured prominently during the workshop with the theme, “Insurance Broking: Transitions and Disruptions,” even though it is just one of the identified “culprits” threatening the continuous existence of many of us in the insurance broking profession. You can only ignore the threat that new technologies pose at your own peril.
In 1997, when Multilinks phone was N156,000 (about N2.5m today) and it was easier for a camel to pass through the eye of a needle than for you to get a NITEL phone line, many people settled for pagers which sold for about N24,000 (or was it N8,000). You could not call with pagers, but people could leave messages (page you). This made it possible for your business contacts to reach you. The younger generation might not understand, but it was big deal then. Enter mobile phones in 2001 and pagers became obsolete and the manufacturers, wholesalers and retailers were sent out of business. This can easily happen to players in any sector of the economy, including insurance brokers.
The threat of technology to people’s sources of livelihood is real, but it did not start today, it has always been there. But for all its mightiness, technology is not all in all. In 1990, I watched a documentary on American best TV commercials. One of the commercials had to do with a bank customer. From the moment he entered the bank, his encounters were virtual, not even one bank staff to attend to him. At a point he could not take it anymore; he yanked the robot from its source of power supply and in exasperation screamed: “I just want to talk to somebody.”
Many customers/clients still want to talk to somebody. They want to deal with real people, not just emails, WhatsApp, Twitter, Instagram and other platforms and technological devices that have made doing business, faster and more efficient. We also have old-fashioned customers, who are stuck in the old ways of doing insurance transaction. As long as such customers exist, the old ways will continue to run side by side with new developments and modern ways of doing business.
Salesmanship has been acknowledged universally as the most effective way of closing business deals. I am not aware it has been overthrown. If salesmanship is still king, modern technology will continue to collaborate with it for increased efficiency, not replace it. One major handicap of salesmanship though is its painfully limited reach. It is not ideal for mass products like micro insurance products, where you need to reach millions within a short time to make the venture meaningful and profitable. It is no brainier that the future of micro insurance lies in information technology. Happily, as we observed last week, one of the platform, mobile phones, is already here. The insurance industry, the National Insurance Commission and the Nigerian Communication Commission need to synergise, move fast and make the mass sale of micro insurance to millions of Nigerians via mobile phones a reality.
Technology is moving at a geometric progression, while many older people, including insurance brokers, are moving in arithmetic progression. Only the future will tell whether or not brokers have adapted enough to stay afloat. Brokers must learn and adapt new ways of doing insurance business, if not many of us might be asking “who moved my cheese” at some point. But I do not believe that new technology will sweep insurance brokers out of business any time soon. The Nigerian society is still very much unsophisticated, or rather; the percentage of technology-savvy clients is still low. But it is better to be prepared than wait to be forced to change, which might be late.
I also believe that the invaluable professional advisory services, claims processing and other offerings of insurance brokers, which are essentially done free of charge to the client, will continue to count for brokers. Nobody abandons what is good, especially if it is free. That of insurance brokers will not be different. Insurance brokers have more going for them than what is against them. Insurance broking might evolve, but it has come to stay.
It is said that to reach the young generation, you need to put the message on their mobile phones because they live with the phone 24/7. Thankfully, the young generation of brokers will come from amongst these mobile-phones-hugging youths. They will be technologically savvy and also speak their language. So who says technology will overtake the insurance broking industry. What will happen at the worst is that the old brigade will fall by the wayside, while a new generation of technologically compliant insurance brokers will take over the insurance broking flag and keep it flying. But for now, we will have to give to Caesar (Old ways) what is Caesar’s and to God (new ways) what is God’s. But overtime, those who cannot adapt will fizzle out; my humble thoughts.