With the nation’s insurance industry contributing less than 0.1 per cent to Nigeria’s Gross Domestic Product (GDP), experts have recommended the Blockchain Technology (BT) to be the catalyst of growth to nation and the insurance industry.
Specifically, the insurance and financial experts maintained that BT can drive and sustain the level of GDP growth desired by the government leveraging on the immutability and transparency of the technology.
Speaking at the Blockchain Africa Conference organized by Fintech Worldwide Limited in association with Eka Consult in Lagos, Luis Novella of Vivat Group, United Kingdom (UK), said the technology can be trusted in accountability, ease of doing business and high value delivery.
Novella said that Nigeria can gain at least eight per cent GDP growth in the economy through the insurance industry using BT, adding that the technology can be used to transact securely and also enhance customer experience.
“We consider insurance to be one of the biggest opportunities to grow the countries’ GDP using blockchain as insurance contributes less than one per cent of the Nigerian economy.
“Blockchain is a way to deliver several types of insurance and I see very great opportunities in insurance. Nigeria can diversify using this technology as there are also great opportunities in agriculture and the government can strengthen that position in making Nigeria the technology leader for Africa.
“Nigeria could be the hub for crop insurance in Africa, but that is if the government wants it to be. The government has seen this already, just that there has been less penetration for agricultural insurance credit in Nigeria.
“There is a target of 3.8 million farmers by the government in the nearest future. There are a lot of subsidies already and different bad weather conditions like drought and erosion can affect farmers’ productivity, but crop insurance on BT would ensure food supply security and social inclusion.
“So there is an opportunity in insurance and there is GDP value to be created and at the same time there is an opportunity to help diversify the economy in a more robust way,” Novella added.
He stressed that this could only be achieved if the business environment and the government can work together and be brave to do it as it cost little to operate and the customer experience is great.
The Chief Executive Officer, Precise Financial Systems, Yele Okeremi, said that BT is very well suited to provide very efficient insurance products as someone can actually have a parametric insurance, which is a digital element that confirms that an insurance policy should be paid out.
“Keying into this technology would reduce about 50 per cent cost of operating regular insurance policies outside Blockchain to about 5 per cent or less and this makes it more attractively priced for farmers.
“BT can also be used to verify the quality of products, materials or farm produce ready for export through the technology and also its source,” he said. BT is an open decentralized ledger that supports smart contracts which are fixed contracts which helps to eliminate the need for intermediaries.