Expert Calls For Adoption Of Black Box Tech In Nigeria To Deepen Insurance Penetration

The Founder and Chief Executive Officer, Rheydolence Limited, Ms Eno Essien, has advocated for the adoption of “Black Box” technology in the Nigerian insurance industry to create value for customers and deepen penetration.

Ms Essien made the advocacy while speaking on the theme “The Emerging Pace of Insurance” at the 2021 Insurance September Conference held virtually recently.

She said the adoption of the Telematics or Black Box technology in Nigeria will create the value that customers seek to have and the rate of insurance penetration would deepen as well as reduce the rate of losses through proper monitoring.

Telematics, often referred to as Black Box in insurance, is the technology that enables users to monitor and appraise behaviours while driving.

Telematics technology customizes insurance to your pattern of driving. It works by monitoring your real-time driving behaviours to provide an objective picture of your driving habits. Some insurers use telematics to monitor the key risk factors associated with driving a car.

Ms Essien said the cost of installing a Rheytrak tracking device on a vehicle such as trucks, SUV, Saloon Cars, Tricycles and motorcycles is N40,000 and yearly renewal of N15,000, adding the above-mentioned price is determined by a combination of factors including exchange rate and Global Positioning System (GPS) as well as the Nigerian Communication Commission.

She said Rheydolence has been working with insurance companies in the past 15 years providing vehicle tracking solutions to vehicle users and through insurance companies, noting that the only point where customers understand value is when their vehicles have been recovered and returned to them. There is a need for all insurance companies in Nigeria to adopt this technology as a value addition to their customers since there are a lot of advantages.

Using the Black Box or Telematics as value addition to attract customers she said, “Insurers have used this new technology to determine rates, incentives and discounts given to customers” and called on those who have not availed the use of the technology to do so.

“The future value of insurance wrest on what the policyholder experiences are when something unexpected, indeed, happens. When the promises made by insurers can be resolved without reference or recourse to the Regulator, the real value of insurance will begin to show and more people will embrace it as a reliable source of relief.

Rheydolence Limited is a leading provider of Global Positioning System (GPS) vehicle tracking systems, aimed at offering innovative and cost-effective vehicle tracking solutions comprising of hardware as well as software. GPS tracking technology is a unique way for companies and individuals to monitor and control their cars, jeeps, trucks and other vehicles to their precise details.

We are licensed by the Nigerian Communications Commission (NCC) and specialize in Vehicle Tracking, Fleet Management and Satellite Navigation. We play a leading role in the delivery of customised and integrated GPS vehicle tracking solutions in Nigeria.

Using our technology, you can easily spy on a Vehicle as it is moving, in order to increase your security and safety. The Rheytrak vehicle tracking device allows you to track and protect your vehicle, an early theft warning alert.

How It Works

Rheytrak is a vehicle tracking system, an electronic device installed in a vehicle to enable the owner or a third party to track the vehicle’s location. The vehicle location at all times is determined using signals received from the GPS satellites. It processes the coordinates and transmits them via the communication network to the webserver which has mapping software that translates them to actual physical locations – street names, federal highways, local governments and cities – from where it is accessed by the call centre or user on an internet enabled PC and smart phone.

Coverage.

The architecture of Rheytrak® relies on the GSM network to communicate between the vehicle and the control station. Rheydolence Limited has invested in detailed mapping of towns and cities incorporating common landmarks such as Airports, Boundaries, Built-up Areas, Bus-stops, Cities, Financial Houses, Gas Stations, Hotels, Local Government Areas, Rail lines, Rivers, Road Networks, States, Worship centres, etc. This ensures the easy location of vehicles where ever they may be.

Recovery.

Rheydolence Limited has recorded a high success rate in vehicle recovery from various locations including Aba, Abuja, Abeokuta, Bayelsa, Enugu, Jos, Kaduna, Lagos, Makurdi, Mowe, Nnewi, Oka Akoko, Ondo State, Owerri, Port Harcourt, Sango Ota, Ibadan, Idiroko, Republic of Benin, Sokoto, Warri, Zaria, among others and we attribute this first to the grace of God and then the effectiveness of our product.

It is believed that the adoption of cutting-edge technology such as the Black Box that provides additional value to policyholders is a sure way to attract more people to embrace insurance in Nigeria to increase our penetration rate.

Insurance penetration rate has remained less than 1% in Nigeria and Nigeria ranks fifth among nine insurance markets in Africa in terms of premiums in 2020 but came in last in terms of insurance penetration, according to the latest sigma report from Swiss Re.

Coming from the stunted growth recorded since it contracted 2.9% in 2017, the Nigerian insurance sector recorded a negative 15.3% growth in 2020 according to the National Bureau of Statistics (NBS).

The industry now consists of 58 insurers; 13 composite insurers, 31 general insurers and 16 life insurance companies after NAICOM cancelled UNIC Insurance plc operational license in April 2021 due to solvency and poor operational performance.

In terms of global relevance, the Nigerian insurance sector lagged significantly with a total contribution to global premiums at 0.03% as it ranks 63rd of 88 countries profiled by Sigma Research in 2019. Compared with Sub-Saharan peers, the narrative is similar, the sector’s insurance penetration (GPW/GDP) remains poor at 0.3% with South Africa (13.4%), Morocco (3.9%) and Kenya (2.3%) advancing in reach. Similarly, the sector grapples with a low insurance density (GPW per capita) of $8.0 compared with South Africa ($803.0), Morocco ($127.0), and Kenya ($43.0).

While the low insurance penetration coupled with the large and growing population of Nigeria appears attractive, some factors such as little awareness & understanding of insurance products, lack of trust especially with regards to claim settlement, sociocultural & religious beliefs of Nigerians, weak enforcement of compulsory insurance policies, and high poverty rate remains limiting. Despite the promotion of microinsurance by NAICOM and the licensing of some micro-insurance companies, there has been little or no growth in the Insurance penetration especially at the retail end.