Can Kola Oyeneyin’s AutoGenius really revolutionise Nigeria’s insurance industry?

RUTH OLUROUNBI examines the underutilised potential in Nigeria’s insurance industry, asking if the new entrant into the market has what it takes to redefine the industry. Her report
One the backdrop of the call from the Commissioner for Insurance, Fola Daniel, for a strategic change in marketing strategies in the country’s insurance sector, Venia Technologies have developed a product they are confident will revolutionise the industry.
Earlier, Daniel had said the insurance sector’s “marketing strategy must change,” saying that “our product design and packaging must change; our approach to policyholders and their complaints must change and all hands must be on deck to ensure that the message of insurance is taken to the grassroots.”
At the launch of AutoGenius, a platform where Nigerians are expected to experience better insurance service delivery within five minutes, on October 16, 2014 in Lagos, Kola Oyeneyin, CEO, Venia Technologies, announced that “what we are providing is the cheapest insurance platform in Nigeria. When you come here, you’re able to buy the cheapest insurance product in Nigeria.”
With capacity to deliver potential estimation of N300 billion annually, should only 10 percent of Nigeria’s 170 million population take at least one form of retail insurance product in the market, analysts believe that Nigerian market for insurance is a big one.
Yet, currently, the sector generates an abysmal N50 billion in retail insurance. But with the entrant into Nigeria’s insurance market, analysts are confident that there will be a significant improvement in revenue gereation in this market.
Oyenieyin, while making his presentation during a product launch held in Eko Hotels, said in less five minutes of buying an insurance product on the AutoGenius website, the insurer gets his/her insurance certificate. According to him, the platform “allows you to instantly know from a regulatory body whether you bought the right insurance policy or not.
“One of the biggest problems in Nigeria is that you buy an insurance policy and it’s fake. But the moment you buy insurance on our platform, we upload on your behalf to NIIJ platform anf you get an SMS from them that you bought the right insurance from AutoGenius.”
Oyeneyin explained that another innovative from AutoGenius “is that it takes the value of your car and helps you find the insurance cover at the right platform across our six partners (AIICO Insurance, Custodian & Allied Insurance, Leadway Assurance, NEM Insurance, Royal Exchange Plc. & Sovereign Trust Insurance), who have the best insurance service provider as far as we are concerned in Nigeria.”
Expectations from AutoGenius
With these promises, analysts are expectant that more auto users would be motivated to buy insurance, given the safety, cheaper and the younger audience appeal initiatives it is bringing to the table. For instance, out of 105 million Nigerians (who are below the age of 35) 65 million of them are within the age range of 18 to 35 years and 30 million of these range consists of young people between the ages of 25 and 35.
Statistics has shown that 78 per cent of Nigerians own a cell phone or have internet access, while 83 per cent of Nigerians online engaged in social media, according to a UN report. With AutoGenius’ drive to make insurance more fun in Nigeria, one would expect that 75 per cent of 30 million Nigerians who fall under the category of car owners in Nigeria will be properly motivated to buy car insurance.
Additionally, analysts expect that the new product would checkmate malpractices in the sector. It is expected that participation of operators of fake insurance would be drastically reduced, if not totally checkmated.
National Insurance Commission (NAICOM) says that 15.5 million vehicles on Nigeria’s roads, only 2.2 million are insured. And according to the body, a larger number of the 2.2 million insured are done with fake agents. This is a big drain on the country’s economy, as analysts reported an N58 billion loss in the sector to fake insurance agents.
Challenges before Venia Technologies
For AutoGenius to successfully checkmate malpractices in this sector, it needs provide an intensive education and reorientation campaign through mass media engagement. It will be to their advantage to partner telecommunication providers, traditional and the new media in driving an educational campaign on their products works and the needs for Nigerians to use it.
AutoGenius, being a pilot in the techsurance space, may have open up the door for other to have a slice of the cake. Insurance market is very huge and relatively untapped, as the Deputy Director of the Nigerian Insurance Commission, Mr Segun Farinu, who represented Fola Daniel, mentioned at the unveiling event.
“Insurance penetration is comparative low in Nigeria and relatively untapped. Looking at the country’s population, that is a pointer for immense opportunities inherent in this sector of the financial services in Nigeria,” he said, before announcing that the regulatory body was “pleased to note that NAICON has begun the process of fine-tuning some of its regulatory police frameworks aimed, among others, to increase insurance penetration through principle based supervision, that when completed, will open up more distribution channels and other services for the purpose of insurance market growth.”