African Insurers Changing Market Narratives Through AI Adoption

By EDET UDOH

Globally, artificial intelligence (AI) is expected to play a pivotal role in digital transformation across all industries and society, including the insurance industry.In recognition of the importance of AI in enhancing efficiency and effectiveness in business operations, improving customer experience and reducing cost, insurance operators in Africa are leaving no stone unturned in ensuring the adoption of AI to deepen the continent’s insurance market.

What is Artificial Intelligence (AI)

According to Britannica, AI is the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings. The term is frequently applied to the project of developing systems endowed with the intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalize, or learn from past experience.

The Managing Director/CEO of Cowry Asset Limited, Mr. Johnson Chukwu, speaking at an insurance industry event in Lagos, Nigeria, with the theme, “The World Of AI: How Insurance And Pension Sectors Can Explore Opportunities For Market Penetration,” defined AI as a simulation of human intelligence into a machine format such that the machine can do things that are routine in nature, faster.

This article will spotlight how some African countries like Nigeria, Egypt, South Africa, Algeria and Kenya strive to ensure the adoption of AI and how they are taking advantage of technology to improve the efficiency and effectiveness of their operations.

Critical Role of AI in Reshaping African Insurance Landscape

In a recent virtual Question and Answer (Q&A) session themed “Digital Transformation in Africa Insurance Market,” Funmi Omo, CEO of Enterprise Life Nigeria, highlighted the critical role of digital technologies in reshaping the insurance landscape.

Omo explained how digital platforms, artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), data analytics, and blockchain technology are disrupting traditional insurance models.

Addressing the specific needs of the African market, she underscored the importance of developing user-friendly insurance apps optimised for low-bandwidth connections and offline capabilities, offering flexible payment options, and providing 24/7 customer support.

In the same vein, Mr. Johnson Chukwu in his presentation, stressed that, with technology, the negative perception that most people have about insurance and claims payments will be wiped out as it makes insurance policy subscription and claims payments seamless and faster.

According to Chukwu, the insurance industry in Nigeria and Africa as a whole will benefit greatly by adopting AI as it will improve their customers’ experience, engender confidence and trust, improve service quality and reduce costs, adding that, AI holds the promise of transforming the traditional insurance landscape by addressing critical challenges, disrupting existing norms, and optimising risk management processes.

He said the adoption of AI would enhance service efficiency, stressing that, a decrease in cycle would lead to faster execution, improved accuracy, detailed data capture flexibility & scalability, and ensure improved productivity.

“With AI, you can settle claims within some hours or days on motor insurance. No doubt, AI will help in improving claims settlement. AI can harvest records of the insured in terms of making claims, which will enhance accurate pricing of policy,” he said.

For Customer Service, he pointed out that, AI tools such as chatbots, a virtual assistant, can help to improve customer experience, saying, Chatbots are available 24/7 to give basic advice, check billing information, and address common inquiries and transactions, as it can be deployed to recapture customers’ data more effectively, even as it can more effectively analyse investment portfolios and recommend necessary actions such as sell, buy, hold, among others.

Advancement in AI, he noted, is underpinned by the drive for convenience and efficiency, which are the two most important competitive tools in the Business World, stating that, businesses and industries that want to remain relevant in the economic ecosystem will therefore need to embrace AI as an integral part of their business DNA.

How AI Will Aid Underwriting and Pricing

Market experts said that by 2030, underwriting as we know it today ceases to exist for most personal and small-business products across life and property and casualty insurance. The process of underwriting is reduced to a few seconds as the majority of underwriting is automated and supported by a combination of machine and deep learning models built within the technology stack.

These models are powered by internal data as well as a broad set of external data accessed through application programming interfaces and outside data and analytics providers. Information collected from devices provided by mainline carriers, reinsurers, product manufacturers, and product distributors is aggregated in a variety of data repositories and data streams. These information sources enable insurers to make ex-ante decisions regarding underwriting and pricing, enabling proactive outreach with a bindable quote for a product bundle tailored to the buyer’s risk profile and coverage needs.

Regulators review AI-enabled, machine learning–based models, a task that requires a transparent method for determining the traceability of a score (similar to the rating factor derivations used today with regression-based coefficients). To verify that data usage is appropriate for marketing and underwriting, regulators assess a combination of model inputs.

They also develop test policies for providers when determining rates in online plans to ensure the algorithm results are within approved bounds. Public policy considerations limit access to certain sensitive and predictive data (such as health and genetic information) that would decrease underwriting and pricing flexibility and increase anti-selection risk in some segments.

Price remains central in consumer decision-making, but carriers innovate to diminish competition purely on price. Sophisticated proprietary platforms connect customers and insurers and offer customers differentiated experiences, features, and value.

In some segments, price competition intensifies, and razor-thin margins are the norm, while in other segments, unique insurance offerings enable margin expansion and differentiation. In jurisdictions where change is embraced, the pace of pricing innovation is rapid.

Pricing is available in real-time based on usage and a dynamic, data-rich assessment of risk, empowering consumers to make decisions about how their actions influence coverage, insurability, and pricing.

Claims

Claims processing in 2030 remains a primary function of carriers, but more than half of claims activities have been replaced by automation. Advanced algorithms handle initial claims routing, increasing efficiency and accuracy.

IoT sensors and an array of data-capture technologies, such as drones, largely replace traditional, manual methods of first notice of loss. Claims triage and repair services are often triggered automatically upon loss. In the case of an auto accident, for example, a policyholder takes a streaming video of the damage, which is translated into loss descriptions and estimated amounts. Vehicles with autonomous features that sustain minor damage direct themselves to repair shops for service while another car with autonomous features is dispatched in the interim. In the home, IoT devices will be increasingly used to proactively monitor water levels, temperature, and other key risk factors and will proactively alert both tenants and insurers of issues before they arise.

Automated customer service apps handle most policyholder interactions through voice and text, directly following self-learning scripts that interface with the claims, fraud, medical service, policy, and repair systems.

The turnaround time for the resolution of many claims is measured in minutes rather than days or weeks. Human claims management focuses on a few areas: complex and unusual claims, contested claims where human interaction and negotiation are empowered by analytics and data-driven insights, claims linked to systemic issues and risks created by new technology (for example, hackers infiltrate critical IoT systems), and random manual reviews of claims to ensure sufficient oversight of algorithmic decision making.

Claims organizations increase their focus on risk monitoring, prevention, and mitigation. IoT and new data sources are used to monitor risk and trigger interventions when factors exceed AI-defined thresholds. Customer interaction with insurance claims organizations focuses on avoiding potential loss. Individuals receive real-time alerts that may be linked with automatic interventions for inspection, maintenance, and repair.

For large-scale catastrophe claims, insurers monitor homes and vehicles in real-time using integrated IoT, telematics, and mobile phone data, assuming mobile phone service and power haven’t been disrupted in the area. When the power goes out, insurers can profile claims by using data aggregators, which consolidate data from satellites, networked drones, weather services, and policyholder data in real-time.

This system is pretested by the largest carriers across multiple catastrophe types, so highly accurate loss estimations are reliably filed in a real emergency. Detailed reports are automatically provided to reinsurers for faster reinsurance capital flow.

AI: Key To Insurance Growth In Nigeria

Speaking at a recent industry event in Lagos the immediate past Commissioner for Insurance/CEO of the National Insurance Commission (NAICOM), Mr. Sunday Olorundare Thomas, noted the importance of artificial intelligence (AI) saying it is key to the future of insurance business in Nigeria.

Thomas who was represented at the event by the Deputy Director, Lagos Office of NAICOM, Ajibola Olabisi Bankole, urged insurance operators to increase adoption in this area as it gives better productivity and enhances profitability while ensuring quick service delivery and claims payment to insurance consumers.

Technology adoption, he said, is part of the 10-year roadmap of the insurance industry, stating that, NAICOM, as a regulator, will continue to evolve policies that will engender the growth of the industry, increase penetration and contribution to the nation’s GDP.

Level of Adoption of AI in Nigeria

Although insurance players in Nigeria are working assiduously to ensure the adoption of AI, many said the level of adoption of this technology in Nigeria is still at its formative stage.

In an interview with this medium, the President/Chairman of Council, Chartered Insurance Institute of Nigeria (CIIN), a training arm of the insurance industry in Nigeria, Mr. Edwin Igbiti, while assessing the level of adoption of AI in the Nigerian insurance industry, scored the industry low.

“I would assess the level of adoption of Artificial Intelligence (AI) by insurers in Nigeria as being in its early stage, with a few pioneers exploring its potential. While there is growing recognition of AI’s transformative power, many insurers are still in the process of understanding its applications and benefits.

“On a scale of 1-5, with 1 being “limited awareness” and 5 being “advanced adoption,” I would rate the current level of AI adoption in Nigeria’s insurance industry as a 2, “exploration and experimentation.” Some insurers are starting to explore AI-powered solutions, but widespread adoption and implementation are still limited.

“However, there is a growing interest in AI-powered solutions, and some insurers are starting to explore its applications in areas like automated underwriting, claims processing, and customer service. As the industry continues to evolve, I expect to see more insurers embracing AI to enhance their operations, products, and customer experience.

On how AI revolutionise customer experience and deepens growth, he said “I would say that AI can revolutionise customer experience in the Nigerian insurance industry through enhancement of personalized services and tailored policy offerings, streamlining claims processing and reducing settlement times which will be of great help to the Insurance branding image, providing 24/7 customer support and engagement through chatbots and virtual assistants, offering real-time policy management and self-service capabilities, enabling data-driven underwriting and risk assessment and improving fraud detection and prevention in general.

Speaking further on the level of adoption of AI in Nigeria, CIIN boss said, “In the next ten years, I would like to envision the Nigerian insurance industry embracing AI and technology to become more efficient, customer-centric, and innovative. “Insurers will leverage AI for things like; data-driven decision-making and product development, enhanced risk assessment and underwriting, automated claims processing and settlement, personalized marketing and customer engagement, improved regulatory compliance and risk management and increased adoption of digital channels and self-service platforms to mention a few.

Also, in a recent online questions and answers session theme, “Digital Transformation in Africa Insurance,” the Managing Director/CEO, Enterprise Life Assurance Limited, Nigeria, Mrs. Funmi Omo, highlighted the critical role of digital technologies in reshaping the insurance landscape.

She emphasised the role of innovative products like AdvantageConnect, the company’s digital insurance platform leveraging geolocation technology to enhance customer interactions and efficiency.

“Prospective and existing customers can now connect with any of our LifePlanners closest to them, to access a range of services, and receive a tailored policy in less than five minutes,” Omo explained.

Omo also acknowledged the challenges traditional insurers face during digital transformation, such as integrating legacy systems, overcoming cultural resistance, securing the right talent, navigating regulatory hurdles, and ensuring data privacy and security.

“Modernizing legacy systems is complex and costly, but it is essential for a more efficient and responsive service,” she noted.

Furthermore, Omo highlighted the transformative potential of AI and ML in expanding coverage to underserved segments by analysing alternative data sources and automating claims processing.

She underscored the importance of upskilling employees and fostering a culture of innovation, suggesting the establishment of dedicated innovation labs and cross-functional teams to drive collaborative efforts.

Despite regulatory challenges, Omo pointed out that the rise of insurtech has significantly boosted financial inclusion. She emphasised the significance of balancing innovation with trust to ensure customer confidence and compliance.

“Insurers who can strike the right balance between innovation and trust will be well-positioned to thrive in the digital age,” Omo concluded.

Meanwhile, at a recent training for insurance executives on the application of AI, industry experts expressed concern that the increasing adoption of technology applications, like Artificial Intelligence (AI) and the recent wave of migration of skilled workforce for greener pastures, otherwise called ‘Japa’ is having a huge toll on the insurance industry.

According to them, while the adoption of these applications is enhancing services, the human element and experience, which should build confidence for sustainable relationships with customers, are fast disappearing.

“This is why the importance of training and retraining of insurance professionals cannot be over-emphasised because human presence is still a critical need to build customer confidence,” Fola Daniel, the former Chief Executive Officer, FBS Reinsurance Limited, said.

Daniel made the observation on the side-line of a training program anchored jointly by FBS Reinsurance and Munich Reinsurance of South Africa held recently in Lagos, which was aimed at addressing technical knowledge gaps in the insurance industry.

He said “A good number of underwriters presently rely on software applications to do their underwriting. Experienced driven underwriting is fast fading away.

“Of course, in an era of artificial intelligence, there is virtually no subject you cannot interrogate and get an answer for, but you still need experience, as there are aspects of insurance that artificial intelligence cannot do for you.”

“For instance, marketing. People need to see your face; you need to talk about the company profile. You can do that in prints, but it creates a better impression when they meet you, speak with you and ask questions which answers cannot be obtained from the publications on your website.”

According to Daniel, the purpose of the training, having recognized the knowledge gaps, in the Nigerian and other African markets, is to bridge the technical knowledge gaps, thus impacting the much-needed knowledge.

With the help of AI, insurers in Nigeria now offer enhanced customer service through chatbot assistance. These chatbots can interact with customers, answer queries, and provide personalized recommendations. This ensures round-the-clock support, faster response times, and a seamless customer experience.

An example of its deployment is Heirs General Insurance and Heirs Life Assurance, subsidiaries of Heirs Holdings with their launch of multiple digital channels chatbot named ‘Prince’ to make insurance transactions easier for customers.

This system is described as a demonstration of the companies’ promise of superior value to customers, and quick and accessible service while driving financial inclusion for everyone.

This brings the total number of innovative Insurance firms in Nigeria towing the same lines to only five (5) – Custodian Investment Plc., AXA Mansard, and AIICO.

Leadway Insurance on its part is presently using an artificial intelligence-enabled tool called ‘VehiScanner’, available on mobile devices, to transform the vehicle assessment process, allowing users to scan vehicles, identify damages, facilitate pre & post loss inspection, get the instant inspection report, and accelerate claims requests processes for policyholders, all done conveniently from their mobile devices.

Leadway Assurance Company Limited recently unveiled the “Leadway VehiScanner”, an artificial intelligence-enabled tool available on mobile devices to transform the vehicle assessment process, allowing users to scan vehicles, identify damages, facilitate pre & post loss inspection, get the instant inspection report, and accelerate claims requests processes for policyholders, all done conveniently from their mobile devices.

“With the Leadway VehiScannerAI, we eliminate the tedious and time-consuming traditional vehicle inspection process that requires policyholders to visit physical inspection centres.

Other Companies include Custodian Investment Plc., AXA Mansard, and AIICO Insurance Plc.

This AI-powered tool helps the policyholders perform comprehensive inspections remotely and conveniently via their mobile phone and instantly gets a robust result of inspections and areas that require attention”, Tunde Hassan-Odukale, chief executive officer of Leadway Assurance.

As AI-powered tools and algorithms become increasingly prevalent in the insurance sector, they will likely automate many routine tasks and decisions, which could potentially erode the expertise and experience of human executives. This could lead to a shift in the way insurance companies operate, with AI systems taking on more responsibility for data analysis, risk assessment, and policy issuance.

However, it’s also important to note that AI is not meant to replace human judgement entirely. Instead, it can be designed to augment and support the decision-making processes of insurance executives, providing them with more accurate and data-driven insights to inform their decisions.

To mitigate the potential negative effects of AI on executive experience, insurance companies may need to invest in training programmes that help their executives develop new skills and adapt to the changing landscape. This could involve teaching them how to effectively work with AI systems, as well as how to interpret and make decisions based on the complex data and analytics that these systems provide.

Ultimately, the key will be to strike a balance between the benefits of AI technology and the importance of human expertise and experience in the insurance industry

The National Insurance Commission (NAICOM) said the Federal Government of Nigeria in recognition of the important roles technological advancement such as Artificial Intelligence plays in improving operational efficiency, is positioning Nigeria as the hub for AI solutions in Africa.

The Commissioner for Insurance/Chief Executive Officer of NAICOM, Mr. Olusegun Omosehin, said this in his Keynote Address at the 2024 Nigerian Actuarial Society (NAS) Annual Industry Conference in Lagos.

The Commissioner for Insurance who was represented at the occasion by the Deputy  Commissioner, Technical,  Dr. Usman Jankara Jimada, said this is to be achieved through the development and implementation of a National Artificial Intelligence Strategy aimed at accelerating AI adoption in Nigeria.

While underscoring the Commission’s commitment to the actualization of the federal government’s strategy towards the adoption of AI, Omosehin said “It is thus important that the insurance industry and, by extension, actuaries are at the forefront of its adoption. In conformity with the above, the Commission is committed to the Federal Government strategy. We will ensure that our sectoral regulatory policies are consistent with the outlined goals of the Federal Government while enhancing the stability of the Nigerian Insurance Industry.

“Even though, there are perceptions that disruptive technologies like AI will replace every job and make a lot of skills obsolete. There may be credence to this sentiment if, like actuaries, we are to observe historical patterns. However, technological advances have always changed the landscape regarding jobs and relevant skill sets. Like other technological disruptors, AI has the potential to transform the insurance industry and by extension the actuarial profession.”

While calling on the Actuaries to develop their skill sets in AI to keep pace with evolving trends in technology, he said “…the pace at which AI is evolving means that actuaries have to also continuously evolve and develop skill sets that utilize AI and other machine learning tools or risk being left behind. The Nigerian Actuarial Society (NAS) has a vital role to play in equipping its members with access to the necessary skills to navigate the world of AI. This is why I am inclined to believe that this is one of the reasons we are having this conference.

“In the changing landscape, using AI for vast data analysis will be commonplace. This will enable actuaries to delve deeper into large data; uncovering insights, and developing more accurate risk pricing models and innovative insurance products for the Nigerian populace.

“AI would readily be instrumental in the emerging Insurtech landscape and financial inclusion by enabling the development of microinsurance solutions that cater to the underserved population, Insurtech AI underwriting, etc. Accordingly, as an insurance industry regulator, we believe that this is the time to strengthen our collaborative efforts to ensure responsible AI adoption to maximize the strength and opportunities of Actuaries and AI.”

“As we gather here today, the world is experiencing a significant transformation, driven by technological advancements and data revolution. The financial sector, in particular, is at the point of a significant shift, with artificial intelligence (AI) poised to revolutionize the way we conduct business.  As the Nigerian insurance industry continues to evolve, the intersection of actuarial science and AI presents a unique opportunity to further utilize the power of technology to shape the future of insurance in Nigeria.

“Today, actuaries play a critical role in risk assessment, pricing, and financial stability using advanced techniques such as data science and predictive analytics to analyze complex data and make informed decisions. The profession has become increasingly important in a data-driven world, with actuaries in high demand across various economic sectors.

“One of the things that some older actuaries talk about is the time before spreadsheets existed when calculations were done by hand. The advent of spreadsheets did not eliminate actuaries; rather, it allowed them to do more and explore new aspects of their work. AI may represent another major leap forward, but it is very unlikely to replace actuaries.

“It is therefore exciting to witness conversations around AI especially since the release of Chat-GPT in 2022 which was followed by other AI Chatbots and other technologies to integrate these advancements to improve operational efficiency.”

Mr. Omosehin enjoined delegates at the conference to be expectant and open to ingenuities that will be offered by the presenters in the course of the conference as well as harness the true potential of AI in the Nigerian insurance industry.

He highlighted the areas of mutual collaboration for consideration to include Regulation and Governance, Collaboration, and Upskilling and Reskilling.

“Regulation and Governance: Where we would need robust regulations to ensure the ethical use of AI in insurance, focusing on data privacy, fairness, and transparency.

“Collaboration: Fostering partnership between actuaries and AI developers where actuaries bring domain expertise, while AI developers provide the technical know-how. This would therefore create solutions that are both effective and ethically sound.

“Upskilling and Reskilling: The actuarial profession needs to embrace continuous learning to stay relevant in the AI age. Therefore, equipping actuaries with skills in data science, machine learning, and AI will be essential,” he explained.

He reiterated that the Commission is seriously concerned about the current inadequate professionally qualified actuaries in the Nigerian insurance industry, adding that the Commission is committed to supporting all initiatives and developments that are likely to facilitate actuarial capacity development in Nigeria and enable the Nigerian insurance industry to access qualified actuaries.

He said this is part of why the Commission is excited about the prospects AI brings to the actuarial profession in Nigeria.

According to him, the convergence of actuarial science and artificial intelligence holds immense potential for transforming our industry. By embracing the strengths and opportunities of AI while addressing its weaknesses and threats, we can navigate this new landscape with confidence and foresight.

While assuring the actuaries of the Commission’s support, NAICOM Boss charged NAS to seize the moment of the conference to collaborate, innovate, and lead the way in shaping the future of the Nigerian insurance industry to facilitate the enthronement of a more sustainable and inclusive insurance ecosystem that benefits all stakeholders.

AI Adoption in South Africa

In South African, according to Mishaya Chettiar, Executive Head at Everything Insure, in her article “How InsurTech’s Are Disrupting SA’s Insurance Industry By Putting The Customer First,” By using technologies such as AI, machine learning, and data analysis, Insurtech is enabling the creation of insurance products with intelligent underwriting that are more competitively priced through adaptable and tailored solutions, empowering consumers with the ability to make changes to their insurance plans or submit a claim anywhere at any time, and facilitating the ability to stop and start their insurance plan based on when they need it and when they don’t, with just a simple click of a button. Prior to the adoption of these technologies in the industry, there was no way to tailor products to individual customers or to tailor underwriting rules.

“These technologies have enabled greater efficiencies for customers in regard to timely claims processes, risk evaluations, and the processing of policies. And, with AI, insurance systems can automatically make changes or suggest new offers to a customer’s profile based on changes to their risk profile or shifts in the insurance industry.

“Until now, insurance was a complex and confusing subject to tackle for consumers who knew very little about the industry. But, Insurtech is empowering customers with a greater level of information at their fingertips before they make a purchasing decision by enabling consumers to compare the products, services, and features of different insurers and find the one that fits just right for their unique wants and needs.

“Essentially, Insurtech is giving South African consumers greater agency in their insurance decisions and is leading to improved outcomes in the way that the market operates – in favour of the consumer over the industry.

“When a business integrates customer centricity into its business strategy, the organisation can change the way that it thinks about and communicates with its customers on all levels. This results in more authentic customer experiences and significant cost savings for consumers.

“And, just like the FinTech revolution brought on a new wave of innovation within the financial services industry, Insurtech is primed and ready to reshape and redefine what insurance looks like and what it means for consumers not only in South Africa but across the African continent and the rest of the world. Now, just like they’re able to with every other area of their lives, consumers will be able to take greater ownership of their insurance portfolio,” she stated

AI Adoption in insurance companies in Egypt

According to analysts the adoption of artificial intelligence (AI) in Egyptian insurance companies is an area of growing interest. AI has the potential to revolutionize various aspects of insurance operations, including underwriting, claims processing, customer service, fraud detection, and risk management.

However, successful adoption depends on change management practices and data readiness. Insurance companies should focus on building internal tools to foster a productive culture of AI adoption and enhance efficiencies.

The Egypt government’s initiatives to modernize healthcare infrastructure, including digitizing health records, also provide a strong foundation for integrating AI technologies.

Success Stories from Insurers Using AI in Egyptian

Certainly, here are some innovative Egyptian insurance companies that have leveraged technology, including AI, to enhance their services and positively impact lives, some of which include Hood, Mazboot and MerQ.

Hood collects data related to car mileage, gas usage, performance, and engine health. By analyzing this data, it helps drivers save time, and money, and avoid accidents by promoting better driving habits.

Mazboot is an application designed for people living with diabetes. It assists them in self-managing their condition and provides consultations with doctors.

These companies demonstrate how technology adoption can lead to better customer experiences and operational efficiency in the insurance sector. While specific AI success stories may not be widely documented, the industry is gradually embracing technological advancements to meet evolving needs.

Merq claims to be an AI startup that specialises in developing cognitive chatbots in the form of virtual assistants. One of the first virtual assistants they’ve developed is Sally, an Arabic-only Facebook Chatbot that allows people to compare credit cards in Egypt.

The widespread use of technology today isn’t just saving consumers more time and money but is also saving lives. In other parts of the world, the teenSMART driving programme uses computer-simulated technology to teach inexperienced teen drivers about the necessary precautions they must know as young drivers to ensure their safety on the road. Studies show those who complete it have 30 per cent fewer car collisions and accidents.

The health insurance market is also growing to become one of the most innovative in technology, helping ageing populations, patient demands and the rise of diseases to withstand pressure on the costs for delivering care through innovative technology that ensures the quality of services at lower prices.

According to The Financial Regulatory Authority, the insurance industry is estimated to represent almost 0.91 per cent of Egypt’s GDP, which is considered to be one of the most important drivers of Egyptian economic growth.

However, despite economic growth and high investment rate, the industry still faces a lot of challenges ranging from the diversification of its products to the difficulty in outreach. To meet those challenges, the industry inevitability must integrate technology to create sustainable innovative business solutions and help it grow.

Because of the evolving developments, GIZ partnered up with the Financial Regulatory Authority (FRA), the Insurance Federation of Egypt, AUC Venture Lab, and insight2impact to launch the first hackathon InsurHack and gather entrepreneurs, techies, and designers to formulate ten teams to work on developing ten business ideas that solve specific challenges.

Under the theme of “Innovating Egypt’s insurance sector,” the hackathon addressed the insurance sector’s main challenges in Egypt that hinder its progress and the mechanisms that can help make it a significant key player in the country’s economy.

“The hackathon addressed four main challenges that face the insurance industry: developing data analysis tools for insurance companies; reaching low-income insurance segments, and creating a competitive edge for SMEs through insurance,” said Hayder Al-Baghdadi, Head of Programmes: Promotion of Financial Inclusion in the MENA Region. (Source: egyptianstreets.com).

Adoption of AI In the Algerian Insurance Industry

The insurance industry in Algeria has taken a significant step into the technology era with the launch of Hayat, the first artificial intelligence (AI)-based insurance chatbot by the life insurer Macir Vie. This move reflects the growing interest in AI adoption within the industry. While the adoption of AI in Algeria is still in its early stages, there’s potential for further growth and transformation. Here are some ways AI can impact the insurance sector:

Fraud Detection: AI algorithms can be trained to detect patterns of fraud in insurance claims, helping companies identify fraudulent activities before they result in significant financial losses.

Personalization for Customers: By leveraging customer data, insurers can use AI to develop personalized products and services that better meet individual customer needs.

Faster Claims Processing: AI can automate routine customer inquiries and claims processing, allowing insurers to provide more efficient and faster service to their customers.

Legacy System Solutions: AI can extract logic and data from legacy systems while API-enabling them to feed into AI solutions.

Learning and Development (L&D): AI can play a role in constant reskilling, making learners more agile and responsive to industry and organizational changes.

Successful AI adoption depends on change management practices and data readiness. Insurance companies should focus on building internal tools to foster a productive culture of AI adoption and enhance efficiencies. Ensuring proper data management frameworks are in place can provide compliance, improved decision-making capabilities, and better insights2. While Algeria’s insurance industry is just beginning to explore AI, it holds promise for future advancements and improved processes.

Hayat is a groundbreaking initiative by the Algerian life insurer Macir Vie. It marks the introduction of conversational artificial intelligence (AI) in the Algerian insurance landscape. Here are the key details:

Purpose: Hayat serves as an AI-driven chatbot designed to assist customers. It’s accessible to the public via Macir Vie’s website at www.macirvie.com.

Functionality: As an AI chatbot, Hayat engages in natural language conversations with users. Customers can interact with it to get information, ask questions, and receive personalized assistance related to insurance products, policies, claims, and other relevant topics.

Benefits:

24/7 Availability: Hayat operates round the clock, providing support even outside regular business hours.

Efficiency: The chatbot streamlines customer inquiries, reducing response time and enhancing overall service efficiency.

Scalability: Unlike human agents, Hayat can handle multiple queries simultaneously, ensuring scalability as customer demand grows.

Consistency: Hayat delivers consistent and accurate information, avoiding variations that may occur with different human agents.

Impact: By embracing AI technology, Macir Vie aims to enhance customer experience, improve accessibility, and stay at the forefront of digital innovation in the insurance sector.

This move by Macir Vie reflects the industry’s increasing reliance on AI solutions, especially in areas like customer service and claims processing.

As AI adoption continues to grow, it’s exciting to see how chatbots like Hayat contribute to transforming the insurance landscape.

Handling of Complex inquiries

Hayat, the AI chatbot developed by Macir Vie, is designed to handle a wide range of customer queries, including complex ones. Here’s how it manages such inquiries:

Natural Language Processing (NLP): Hayat uses advanced NLP algorithms to understand and interpret user input. It can recognize context, synonyms, and variations in phrasing, allowing it to address complex questions effectively.

Knowledge Base: Macir Vie has equipped Hayat with an extensive knowledge base. It contains information about insurance products, policies, claims procedures, and other relevant topics. When faced with a complex query, Hayat searches its knowledge base to provide accurate and relevant answers.

Decision Trees and Flowcharts: For more intricate scenarios, Hayat follows decision trees and flowcharts. These guide its responses based on specific conditions or user inputs. For instance, when handling a claim-related query, it may follow a step-by-step process to determine the appropriate course of action.

Escalation to Human Agents: While Hayat can handle many queries independently, it recognizes its limitations. For exceptionally complex or sensitive issues, it escalates the conversation to a human customer service representative. This ensures that customers receive personalized assistance when needed.

Learning and Adaptation: Hayat continuously learns from interactions. If it encounters a novel query, it adapts by updating its knowledge base or seeking clarification from users. This learning process enhances its ability to handle complex scenarios over time.

Remember that while Hayat is efficient, there may still be cases where human agents provide a better solution. Overall, it aims to strike a balance between automation and personalized support, improving customer experience in the Algerian insurance industry. (Source: meinsurancereview.com).

AI Adoption in Kenya

In Kenya, The ability of artificial intelligence (AI) to process vast amounts of data with unprecedented speed and accuracy is transforming the insurance industry. Through machine learning algorithms, underwriters can now analyze historical data, detect patterns, and predict future risks for any product with greater precision. This newfound insight is fast revolutionizing underwriting practices, enabling insurers to offer more personalized coverage options tailored to individual customers’ unique needs and circumstances, David Muiruri, General Manager, Digital ICT projects & Network Infrastructure at Minet Kenya, said in his article “How Artificial Intelligence Will Revolutionize Kenya’s Insurance Industry.”

He said “The ability of artificial intelligence (AI) to process vast amounts of data with unprecedented speed and accuracy is transforming the insurance industry in Kenya.”

“Traditionally, Kenya’s insurance industry has thrived on providing cover for conventional risks such as medical, motor, fire, travel, property, and personal accident covers. Say, for motor insurance, pricing is only based on the type and age of the vehicle to be insured without regard to the driving habits or identity of the motorist involved.

“Even when an accident occurs, insurance companies rely on police abstracts and a risk assessor’s report with no hindsight on verification of when the accident occurred, who was driving the vehicle, and when and where the accident occurred.

“As the Kenyan insurance industry looks toward the future, it stands at the cusp of a groundbreaking revolution driven by AI that has the potential to transform every facet of the insurance ecosystem unlocking unparalleled opportunities for growth, accessibility, and efficiency.

“One of the most transformative impacts of AI in the Kenyan insurance landscape lies in its potential to streamline and enhance the underwriting process. Traditionally, underwriting has been a time-consuming and resource-intensive endeavour, hindering the development of innovative and tailored insurance products.

“According to the 2019 report by Genpact, 87 per cent of insurance brands are now investing over $5 million in Artificial Intelligence related technologies each year.

“With AI’s ability to analyse vast amounts of data from diverse sources, insurers can now make data-driven decisions in real-time. This enables them to develop personalized insurance offerings that cater to the unique needs and risks faced by Kenyan policyholders. This could see premiums drop, thereby increasing insurance penetration across the country.

“For many years, Kenyan underwriters have faced the daunting challenge of fraudulent claims, especially in motor-related insurance products which have resulted in substantial financial losses, ultimately eating into premiums paid by honest policyholders. AI’s implementation can be a game-changer in this regard, as it can identify patterns and anomalies indicative of fraudulent activities.

“By detecting and preventing fraudulent claims, AI will create a more reliable and trustworthy insurance environment, benefiting both insurers and honest policyholders.

“Customer experience is another area witnessing remarkable transformation through AI adoption. Chatbots and virtual assistants powered by AI are revolutionizing customer service by providing 24/7 support, addressing queries instantly, and guiding customers through the insurance process seamlessly.

“As AI algorithms learn from customer interactions, they will continuously improve, enhancing the quality and efficiency of customer service over time. “Furthermore, AI-driven analytics will equip insurers with deeper insights into customer behaviour and preferences. Armed with this knowledge, insurers can develop targeted marketing strategies and deliver more relevant and valuable insurance solutions to their customers. By providing personalized experiences and seamless interactions, AI-powered insurers can strengthen customer loyalty and retention, fostering a sustainable growth trajectory for the industry.

“However, the successful and faster integration of AI in Kenya’s insurance sector does come with its fair share of challenges. Perhaps the most prominent concern is the availability and quality of data. While AI thrives on data, Kenya, like many African countries, faces data limitations in certain regions and sectors. To harness the full potential of AI, collaborative efforts are required to bolster data collection and sharing mechanisms while ensuring data privacy and security.

“Additionally, the widespread adoption of AI will see some insurance careers wane as AI will automate routine tasks, but it will also create new roles that require specialized skills in data analysis, machine learning, and customer experience management. Insurers must invest in upskilling their workforce to ensure a smooth transition and maximize the benefits of AI-driven innovations,” he added

AI, he said, holds the key to unlocking the true potential of the insurance industry in Kenya, noting that by facilitating personalized underwriting, empowering risk assessment, and combating fraudulent activities, AI is poised to elevate the industry to new heights.

While calling on operators in the Kenyan insurance market to embrace AI with a forward-thinking approach, focusing on inclusivity, data collaboration, and talent development, he noted that by doing so, Kenya’s insurance industry can not only thrive in an ever-evolving digital landscape but also play a central role in safeguarding the financial well-being of its citizens and fostering sustainable economic growth across the nation.

The adoption of Artificial Intelligence (AI) in African countries varies, but there are some notable trends – Africa is increasingly embracing AI, with unique approaches tailored to the continent. Sectors like business operations, healthcare, education, legal services, and transportation are exploring AI’s potential. However, widespread adoption remains a work in progress.

Despite progress, challenges persist. Ill-equipped policy frameworks, data scarcity, and a lack of structured data ecosystems hinder AI adoption. Additionally, ethical concerns around accountability, data bias, transparency, and socio-economic implications need addressing.

Although analysts believe that the adoption of AI by Insurers in Africa is still evolving, they are of the view that by embracing AI-driven strategies, African insurers will not only increase their market penetration but also improve their overall service delivery and customer satisfaction, thereby attracting more customers and growing the industry.

However, while Africa is making strides in AI, experts said there’s still room for growth and development, noting that the journey involves addressing challenges and fostering responsible AI practices.