On the 25th of June 2018, IIB (Insurance Information Bureau) in conjunction with Strathmore business school hosted the Africa Insurance Summit at the Kenya School of Monetary Studies. Insurance leaders from Africa convened for a two-day conference to discuss how the African Insurance Market can leverage disruptive technologies to create growth opportunities and shape the industry.
Being the first of its kind, the Africa Insurance Summit featured an array of seasoned speakers from different insurance firms, regulatory bodies, and data storage companies. However, in this article, we will focus on Dr. George Njenga’s speech on data management in the context of digital disruption. Dr. Njenga is the Dean at Strathmore Business School
Digital Disruption Starts with Data
According to the Association of Kenya Insurers (AKI) 2016 report, there are less than 1M life insurance policyholders in Kenya which is less than 3% GDP rate. However, when you look at the rate of mobile penetration- 88%- you start to see the opportunities available for Insurers to leverage on mobile to boost insurance penetration.
Dr. Njenga kick-started his speech by imploring the delegates to consider the following facts;
- Google is getting into the insurance space
- Mobile services accounted for 8.2% of sub-Saharan Africa’s GDP in 2017
- Mobile platforms are becoming key to insurance uptake
- Rwanda health insurance has gone digital
“With these facts in mind, there’s no way we can continue with our current insurance structures, be it health or motor vehicle. We need to disrupt our market, and data will fuel this disruption.” Said Dr. Njenga.
“We need to educate insurance firms to develop strategic data collection systems. In your company, you need to ask yourselves, what is the data that matters to you? For example, at Strathmore University, we have data scientists who collect data about each student, each classroom, each lecture and the data is easily available on mobile. “Dr. George Njenga advised.
Strathmore Business School partnered with Liquid Telecom earlier this year to set up a data analytics centre focused on data-driven research.
Back to Insurance
“So why shouldn’t insurance firms collect similar data? Why should a woman who uses her car only twice a week pay the same insurance premium with her husband who uses his car throughout the week? Our insurance model has to change.” The dean advised.
Dr. George Njenga is one of the founding directors of Pacis Insurance which currently has a customer base of 80,000.
Dr. Njenga emphasized the need for insurance companies to aggregate industry data to create better insurance models. Operationally, the Insurance Information Bureau would handle the policies and protocols to ensure data protection and privacy, while Strathmore Business School would handle the ‘number crunching’.
“If insurance doesn’t go this route, we won’t be talking about insurance in the next ten years. Let’s remember that insurance is also an indicator of the saving culture of a country. The more insurance, the more development.” Said the dean.
Blockchain and Smart Contracts in African Insurance
Towards the end of his speech, Dr Njenga reminded the delegates that collecting industry data would make it possible to integrate blockchain technology into their processes.
“Blockchain is software the facilitates trust. With insurance on the blockchain, an insurer won’t need to meet a client face to face; they will only need their data. However, if African insurers do not put in place measures for strategic data collection, they will have to watch as data-savvy tech Giants like Google leverage on blockchain to dominate the market.” He warned.
At the end of his speech, Dr George gave the following recommendations for the African insurance market.
- Kenya insurance sector needs mergers and acquisitions to create shared resources, facilitate innovation and cut costs
- Kenya insurance sector needs to work more closely with the Insurance Information Bureau to develop strategic data collection models for the industry
The Africa Insurance summit ended on the 26th June 2018 with Mr Isaac Ng’aru, director at the Insurance Information Bureau urging the insurance delegates not to pay lip service to the insights gained, but rather to apply and share their case studies for the greater good of the industry.
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