By Ebere Nwoji
A renown economist and financial services advisory leader at PricewaterhouseCoopers (PwC), Nigeria, Dr. Andrew Nevin, has predicted that come 2030, branch networks of banks and insurance companies in Nigeria and other African countries would disappear while banks would remain invisible in the scheme of things of financial services sector.
Nevin, who made this prediction at the 10th anniversary public lecture organised by Consolidated Hallmark insurance in Lagos also said that insurance sector operators at the stated date would cease to be mitigators and become co-creators of risk while 90per cent of transactions in the sector would be done through mobile application just as asset management within banking and insurance sectors that would be highly automated.
According to him, financial crime would cease to be while business operators who are not in their best in analytical matters will cease to be in business.
Nevin, said this being the case, insurance sector operators should begin to study the nature of their future customers and begin to come up with products that will suit them.
He also said they should migrate from their current dependence on corporate clients to dependence on retail clients.
He told the insurers that the only way to solve current low insurance penetration in the country was to form strategic alliances, enhance interactions, build trusted relationships to meet changing customers’ needs to reverse the trend.
Nevin also urged insurers to change customers’ needs with new offering by customising insurance solutions. He also enjoined the operators to remove large, entrenched bureaucracies and offer seamless customer experience and use new technology and services to increase access to information that can empower consumers’ decisions.
The PwC chief called for the formation of joint ventures and partnerships between intermediaries, adding that service providers and reinsurers are a good way to augment existing capabilities and established symbolic relationships.
Nevin identified the causes of low insurance penetration to include; poor public perception, absence of innovative products and distribution channels, poor monitoring and enforcement of mandatory policies and complex and lengthy policy and claims processes.
He said extracting profiling data from all of the unstructured purchasing, social media and other digital trails people leave behind would allow insurers to gain unprecedented insights into their health, wealth and behaviour.
“Increased processing power and smarter analytics will pave the way for more informed prevention, risk selection and premium pricing, allowing insurance companies offer cheaper and more personalised products, while still sustaining margins,” he said.
On his part, Chairman of Consolidated Hallmark Insurance Plc, Obinna Ekezie, said financial services in Nigeria is no doubt saddled with the responsibility of providing the fulcrum not only for economic growth but the development of the larger society, adding that how well the sector has been able to deliver on these in the last decade, forms the background of preparations for the role in the next decade.
“The topic of the lecture – Financial Services in the Next Decade therefore aims at x-raying the whole gamut of the sector from banking, Insurance, Consumer perspective – as well as highlighting regulatory developments that are shaping and impacting our businesses.
“Consolidated Hallmark Insurance Plc, like many others have undergone strategic changes to remain relevant and most importantly fulfil our obligations to our customers and indeed other stakeholders. Going into the future we are investing heavily in our technology, people and processes so that we can offer better services to our customers,” he said.
Ekezie noted that insurance is a tool, which absorbs risks from individuals and corporates while at the same time helping to underpin stability and stimulate economic growth.