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East, West African insurance firms failing to go digital

East and West African nations such as Kenya and Nigeria are lagging behind in terms of adopting automated and integrated systems for insurance claim processors.

East and West African nations such as Kenya and Nigeria are lagging behind in terms of adopting automated and integrated systems for insurance claim processors, say experts.

Speaking at a Johannesburg SAP media briefing on the finance industry in Africa, Neo Mathe -- industry value engineer for the insurance industry at SAP Africa -- said most insurance companies in both East and West Africa still largely use paper based methods.

Mathe explained that unlike South Africa, where insurance companies have gone digital, in regions such as East and West Africa it’s a completely different story.

He explained that in a country such as Kenya, for example, there are insurance companies that have stored as much as three auditoriums worth of information in paper boxes.

“Some of the key trends we find especially in East Africa are that some of the insurance companies realise that they have pretty much disintegrated systems and don’t have much of an integrated platform,” he said.

Mathe added, “I was just at a conference in Kenya recently and the regulator said they lose about 4.2 billion shillings every year in terms of insurance fraud claims in the country.”

The fraud claims were either related or multiple claims, where one person has ensured a product with multiple insurers and made claims more than once, he added.

According to Mathe, there is also little communication among different insurers.

Meanwhile, in West Africa, for a client to get their claims processed takes a long time and in most instances the customer has to go to the insurance company personally to verify details in order for the insurance company to make a pay out.

“They don’t talk to each other,” said Mathe.

However, insurance companies in West and East Africa are slowly switching on to becoming more digital.

“They are looking at how they as an industry can get closer together and have a central database that will inform them for example that a car already has been insured,” Mathe said.

“They also want to know how they can get close to their customers because at the moment they are not close enough to their customers as a result risk profiling of customers is not in place,” he added.

Darrel Orsmond, industry head of financial services at SAP Africa, concluded at the briefing that the insurance companies in these regions need to be digital insurers so that they are able to look at every single aspect about their clients and share information with other insurers.

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