Insurance sector player in West Africa, Niyi Onifade has observed that Artificial Intelligence (AI) holds a critical key to unlocking the full potential of insurance penetration in Africa.
Insurance penetration in Africa is marked by a very low penetration rate signifying inherent challenges in the sector. As of 2022, South Africa led Africa in insurance penetration with a rate of 11.3%, followed by Namibia at 7%, Morocco at 2.1%, and Kenya at 1.2%. According to the National Insurance Commission (NIC), Ghana currently has an insurance penetration rate hovering around 1.13% as of 2021.
The majority of countries in Africa have rates below 1%, reflecting a significant gap in insurance uptake across the continent. Africa’s overall insurance penetration stood at 2.1%, making it the second-lowest globally, only surpassing the Middle East, which had a rate of 1.7%.
Key barriers to higher insurance adoption in Africa include widespread poverty, mistrust of insurance companies, and low levels of public awareness about insurance products. These challenges emphasize the need for targeted interventions to boost insurance accessibility and acceptance.
But the Chief Executive Officer (CEO) and Sector Head of Heirs Insurance Group in Nigeria, Niyi Onifade is convinced that these challenges of insurance penetration could be dealt with through the deployment of AI.
He made this observation when he delivered a lecture on the theme “Artificial Intelligence and the Future of Insurance in the Sub-Region” at the West African Insurance Companies Association (WAICA) Education Conference held in Ghana on Monday, November 18, 2024.
Onifade maintains that AI is now a reality and game-changer that has the potential to turn around the low penetration rate in the Sub-region. Proper deployment, he said could lead to insurance accessibility, affordability, appeal, and the development of new products.
“Artificial intelligence has come to stay. I believe that one of the ways through which we can increase insurance penetration in West Africa is through the deployment of artificial intelligence. Today we talk about penetration rates being very, very low in West Africa, in fact in Africa generally, because by the time you exclude South Africa from the figures, then the rest of Africa is doing less than 1%,” the CEO of Heir Insurance Group indicated.
He added that, “I believe that we can do more through the deployment of technology, deployment of artificial intelligence, and we stand to gain a lot by doing that. Talk about speed to execution. We talk about improving our customer experience and deepening insurance penetration. We also talk about the development of new products.”
As AI continues to make waves globally, Onifade’s call to action serves as a powerful reminder that the future of West Africa and Africa’s insurance sector lies in bold and innovative solutions.
