As insurance operators in Africa digs deep on how to utilize technology to deepen insurance penetration, regulator has empahsised the need to ensure adequate protection of the consumer.
At the recently concluded African Insurance Organisation Conference and General Assembly held in Accra Ghana, discussions hovered around digitalization, insure-tech and market penetration.
Ray Ankra, board chairman, National Insurance Commission (NIC), Ghana who moderated the session on ‘Pay As You Go Insurance’ said the insurance industry must embrace technology to entrench and deepen penetration.
Ankra however observed the need for needed infrastructure to enable technology work effectively in different parts of Africa, stating that insurers must push on governments for infrastructure development.
“Technology is the way of life and whether you like it or not, it has come to stay”.
According to him, customers of today are technology savvy, and so have got choice to make when it comes to buying of insurance.
But, George Onekhena, deputy commissioner for Insurance, Finance and Administration who spoke on the sideline of the conference in Accra, said we are not against any insurance company doing Pay As You Go insurance in Nigeria market, but the basic fact is the necessary things for it have to be put in place.
Onekhena described Pay as you go insurance as a variant of usage based insurance, which can be offered at different levels of sophistication.
It is a product that offers insurance companies the opportunity to optimize their relationship with their clients through not only charging premiums that will more closely reflects risk they assume but also offers their customers the opportunity to positively influence the premium they pay through appropriate behavioral and usages choices.”
According to him, it is a product that is therefore mutually beneficial to both parties in the insurance contract provided a fool-proof arrangement can be made to determine usage and claims incidents.
He said insurance companies can offer the product as long as they can make the business case for it, including evidence of facility to objectively determine customers’ specific behaviors and usage patterns. What the Regulator will be interested in are the logic in the business case presented and adequacy of customer protection features.
Onekhena said “Insurance companies have choice to offer the product to their customers. They however have to obtain approval from the Commission. The Commission will pass their request through the usual new product approval process and ensure they meet the test of reasonableness, commercial viability and adequacy of customer protection features. “
In terms of readiness of Nigerians, it depends on choice of insurance companies on the type of product they feel commercially motivated to offer, he stated.