A recent survey carried out by Accenture has revealed that insurance industry will tap into huge revenue potential only through a deliberate transformation and positioning of the sector.
The survey tagged "Consumer Innovation Survey on Insurance," demonstrates that insurance customers want relevant, convenient and cost-efficient products that address their values and needs. The survey shows that the predominant insurance product uptake by 1.5 per cent of the insured population is motor value insurance.
Another survey across several geographies indicates that 67 per cent of customers would consider buying insurance from organisations other than traditional insurance companies, indicating that insurers must take the offensive, make some bets and take some calculated risks to attract and acquire new customers and retain the customers they already have.
According to the survey, "Companies that transform their technologies as well as underlying business models will be equipped to deliver the experiences that customers will increasingly expect and demand. Only true digital transformation at a strategic level will let customers define their experiences rather than simply provide products for them to buy."
Accenture recalls that the EFInA Access to Financial Services in Nigeria 2012 survey confirm that while 28.6 million adult Nigerians are currently banked, representing a banked population of 32.5% of the adult population, only 1.3 million adults, which is 1.5% of the population have personal insurance; as a result of the collaborative strategy and individual actions by banks to focus on specific un-banked and under-banked groups, the banking sector is well on track to dent the financial exclusion trap and to increase banking inclusion to 80% by 2020, and that the insurance industry in Nigeria is over-concentrated on intensively competitive, over-sold and narrow-margin corporate underwriting, dominated by brokers while under-serving and under developing personal risk underwriting.
The same report indicates that the areas where risks are experienced which in turn imply a high need for insurance have extremely low insurance uptake.
According to Accenture, "There is an opportunity for the insurance industry to translate the areas of acknowledged need to effective demand for risk cover."
Some of its key finding show that insurance must be "sold" and the driver for growth in insurance is effective selling predicated on clear customer segmentation and customer centric strategies, and that optimal sales performance insurance is achieved by knowledge-based customer insight, enabled by the combination of distinctive sales methods and supporting sales tools.
On youths and insurance, Accenture says: "With the demography of the Nigeria population, clearly a successful digital positioning will be necessary for insurers to realise the opportunities offered by the younger generation."