Back at the time of its original incorporation in 1963 AIICO was part of the multinational AIG group; today it's an independent insurance company operating within Africa's largest economy and with its headquarters in Lagos where it is listed on the Nigerian Stock Exchange (NSE). Nigeria is Africa's most populous country. Its businesses are booming and per capita income is rising fast. That makes it a prime insurance market, for both corporate and private clients. AIICO Insurance is the largest life insurance underwriter and the leading motor and transportation insurer in Nigeria, writing 33 billion Naira (around $166 million) of business in 2015. It is a major player in the key oil and gas market – which for the time being is the country's main revenue source, though its manufacturing sector, the third largest on the continent, is set to become the long term sustaining force for economic growth. Another growth area for the business is retail insurance, as that sector expands and modernizes to meet the demands of an aspirational middle class market.
Apart from motor cover and other mandatory forms of insurance such as employee liability cover and public liability insurance for businesses, AIICO is big in many other sectors such as education and mortgage protection, where aspirational clients in the rapidly growing middle income groups seek to protect their family and their assets. For example it is important to ensure continuity of a child’s education in the event of a parent's death or disability, and AIICO's Children's Education Plan (CEP) is designed specifically for this need.
Nevertheless insurance penetration is very low in Nigeria, taken up by less than 0.5 percent of its 173 million population. The potential for growth is enormous, says Olusanjo Shodimu, the company's CIO, who has set himself the goal of trebling the volume of AIICO's business through the adoption of innovative technologies in partnership with best of breed suppliers.
Sanjo Shodimu joined the company in 2014 from the leading management consulting and technology firm, Accenture, where he worked for 10 years and led the delivery of various business and technology transformation initiatives for major banking and insurance clients in Nigeria and across the West African region. In that time, he has seen the CIO's role evolved; from ‘just keeping the lights on’ ...to a more engaging function, driving business transformation, innovating for competitive advantage and acting as key strategic partner for business innovation.
In this interview with Sanjo Shodimu, he elucidates on how AIICO is leveraging innovative technologies to disrupt the insurance sales and distribution landscape:
“As the CIO, my main objective, is to sell insurance (absurd, right?); my mandate is to effectively support and enhance the sales and distribution of AIICO’s products & services and deliver superior service to all our stakeholders – be it individual customers, brokers, agents or employees.
Focusing on the customer
To achieve this, there is a need to understand the way the end-users adopt technology. “I have to ask the question, 'where are my customers and how do I reach them?' The big difference between now and ten years ago is that most people have at least one online presence. Digital technologies – including social media and mobility are rapidly emerging as disruptive forces for businesses across all industries (insurance inclusive).
Social media has blurred the lines between people’s lives. That is particularly true in Nigeria but it applies to all Sub-Saharan countries on this continent. Customers are interacting with one another on Facebook, WhatsApp and the rest, so that is where we need to reach them! At AIICO, we are forming alliances to make our products and services available on these platforms.
The same is true of the internet. With motor insurance, if you have a car you need to have it insured and in the past you had to seek out an agent or physically go to an insurance company’s office to get cover, and then wait for approval. Today, you can purchase your motor insurance (and other pre-underwritten products) from AIICO’s online channels at the click of the button.
AIICO is currently transforming its service delivery model. This transformation is underpinned by upgraded technology capabilities, running on a Cloud Ready Scalable Converged Infrastructure.
We are constantly leveraging emerging technology trends to open up more sales channels/points for the distribution of our products. Today, AIICO’s insurance policies can be purchased from third party locations / agents – by providing them with (access to) online tools/platforms to sell our products. This is being achieved with the adoption of cloud technologies. With the cloud, access to insurance products is becoming ubiquitous. Additionally, these partners are helping to increase awareness of these insurance services via their own social media feeds, something that is already positively impacting sales..
In the medium to long term, AIICO will explore the option of moving in-house services to the cloud. The market for cloud services is expected to skyrocket in the next few years and there are many compelling reasons that will make insurers at the forefront of this growth. Internet-enabled, externally provisioned services for managing an entire business process, such as claims processing, expense management or procurement are being adopted across the sector in the matured markets. In this way, AIICO is taking a measured approach. We have identified some services that we think we can easily move to the cloud – for example communication platforms like e-mail, as well as all of our policy authentication services. The benefits have proven outstanding.
In our journey towards exploring creative ways of adopting emerging technologies relevant to our business transformation objectives, we shall continue to take into account security and data protection issues as these are so vital in the insurance industry. AIICO’s approach in this regard is to ensure that all customers' personal information remains fully protected from unauthorised access. At AIICO, we take security very seriously, and we continue to review our systems and infrastructure to ensure utmost confidentiality is maintained.
Data is king
For any organisation to survive in this age of digital transformation, data will be king. We are building a supply chain capability around data - from its collection through to its analysis. As CIO, one of my immediate functions is to provide analytics insights on our business performance – across customers and channels. This is really the next big thing for us at AIICO. We strongly believe this will be one of the key differentiating factors of the winner or losers in the industry.
AIICO's push to capture market share in the retail sector, as an example, is going to rely on effective data management. “In the last few months we have been collecting data from all our sales channels –running analytics within our data warehouse to gain better understanding of our customers' patterns and behaviors. The outcome of this process feeds into our product development effort to enable us develop the right products to meet our customer needs. We believe that leveraging data will become the primary differentiator between us and our competitors.
Over the last two years, AIICO has implemented many significant changes within its technology environment:
- Aligned our Technology Architecture to deliver on the strategic goals of the company.
- Built a fully redundant and available Compute Infrastructure (both Production & Disaster Recovery locations); and made significant investment on the network infrastructure to ensure maximal uptime for transaction processing.
- Streamlined and improved our business applications to drive our core business processing and back office operations.
Also AIICO is implementing a robust and scalable document management solution, which will better equip us to be more efficient in our policy administration and servicing.
Field Salesforce automation is another key area we are exploring to increase our policy count and conversation rate. We are working with reliable partners to automate the process from customer needs assessment to sales / policy conversion. We strongly believe, that with mobility we can reduce the sales-cycle-time for our agents and marketers – making it easier and faster to close deals on the go.
As part of our competitive positioning, especially in the retail space, technology will continue to be an integral part of AIICO’s strategy; put in the words of our Executive Director/COO, Tunde Fajemirokun - “Technology is THE Strategy”. We shall continue to exploit innovative technologies to change and improve the way we engage with our customers and other stakeholders.”