Yinka Bolarinwa

The general public perception of the Nigerian insurance products has not been sophisticated, difficult to understand, traditional and largely unknown by the potential customers.

These to an extent are one of the factors that must be addressed if the insurance market space must be extended. Asides technology deployment product innovation was one the major contributors to the growth and acceptability of the banking sector.

Product development was a necessary cost of doing business, not a strategic initiative. As opposed to today where differentiation in terms of product features is important, during the latter part of the 20th century a soft market meant rates were more of a market driver than product features, and consumers purchased based almost entirely on price.

These days everyone is talking about the competition, how to beat them, join them or just stay the course. New ways to get ahead are becoming harder to find, and for an industry that started on such a simple premise — for consumers to pay in advance for protection against harm, insurance today is an amazingly complicated business.

Increasingly, insurers are taking a closer look at new technologies on the market, and asking tough questions about how they can help drive growth and competitive advantage.

What technologies can I use to drive growth while ensuring compliance? How can trend uncovered using business intelligence help fuel our future success? And what about improving speed-to-market?

In her recent research note, “Early Signs of Interest for Product Innovation in Insurance, Kimberly Harris-Ferrante, research vice president for Gartner’s insurance practice, notes there is “an increased awareness in product innovation among non-life and life insurers.

While focus is broadening to building new and creative products to enable differentiation, drive shareholder value, promote the brand, and seize new market opportunities.”

Unfortunately, an increased awareness alone will not cross the hurdles in the way of innovation in insurance product development. The many hindrances include complicated regulations, outdated processes and a lack of technologies built specifically to manage product development.

These hurdles must be overcome in order for insurance companies to realize the many benefits of rapid product development and speed-to-market.

“Insurance products embody each insurance company’s understanding of the future,” writes Donald Light, senior analyst in insurance practice at Boston-based research and advisory firm ,Celent LLC, in his report detailing product development best practices.

“As an insurance company’s view of possible gains, losses, risks, and opportunities change, its products must change.”

Regulatory challenges

Today, many insurers still struggle with manual, paper-based product development and regulatory filing processes, and often, more time is spent managing compliance with regulations than actually getting the product out the door.

Yinka Bolarinwa is Managing Director/CEO

of Law Union & Rock Insurance Plc.

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