NAICOM Charges Insurance Operators To Embrace AI
By Patience Ikpeme
The Nigeria Insurance Commission (NAICOM) has urged insurance companies in Nigeria to prepare to accept that Artificial Intelligence (Al) will be a challenge they will embrace.
The Commissioner for Insurance, Sunday Olorundare Thomas said that the significant changes brought on by technology, particularly during the COVID-19 pandemic has made it imperative for insurance to look towards AI.
Specifically, he encouraged the industry to make use of technology to enhance accessibility to insurance services.
A recent report has revealed that Apple, Amazon, Microsoft, Google, and Facebook have secured the top five spots in the 2020 ranking established by Interbrand, while insurance giant Allianz languishes in 39th place.
This stark contrast has highlighted a potential collision between internet giants and insurance companies, with the former being relatively young companies, some only 20 years old, and the latter often having well over a century of history.
The GAFAMs, an acronym for Google, Apple, Facebook, Amazon, and Microsoft, are known for their flexibility, speed, and forward-thinking approach, while insurers are seen as more conservative, cautious, and envious of the large tech companies’ data-collecting capabilities.
Initially focused on specific domains, the GAFAMs have steadily expanded into broader industries to increase their market reach. For nearly a decade, companies like Amazon, Apple, and Google have been seeking new avenues that align with their exceptional ability to collect and analyze web-based data. This strategic positioning has granted them an unrivaled competitive advantage in the economy.
The GAFAMs have recently made notable strides in financial services with their online payment solutions, such as Apple Pay, Google Pay, Amazon Pay, and Facebook Pay. Leveraging their technological expertise, they are diversifying and penetrating markets, revolutionizing sectors like health, auto, and home insurance.
For the GAFAMs, insurance is viewed as just another product that can easily be distributed via the internet.
These tech giants have achieved near-monopolistic dominance in their fields, with Google accounting for almost 90% of internet searches and YouTube being the world’s most-watched television channel, boasting over a billion views per day.
Additionally, Facebook attracts 2.7 billion monthly users, Microsoft’s computer operating tools are installed on nearly 88% of computers, Amazon commands nearly 50% of the US e-commerce market, and Apple controls significant shares of the global smartphone and tablet markets.
These GAFAM giants have tapped into a global market that extends far beyond their respective countries, granting them access to potential customers worldwide. This quasi-monopoly often leaves little room for competition.
The ease of access to these tech giants’ services is facilitated by user-friendly connection networks like mobile applications and internet-connected devices. This globalized and user-friendly distribution network stands in stark contrast to that of insurance companies. Due to regulatory constraints, insurers struggle to expand their brands on a global scale.
