The National Insurance Commission (NIC) has expressed concern over the recent surge in fraud and its ripple effect on the insurance industry.
Acting Commissioner of Insurance, Michael Kofi Andor, emphasized that insurance fraud poses a significant threat to the insurance industry, potentially resulting in substantial losses for insurers.
“I know some of you chat people online, some of you have a chatbox, WhatsApp, AI applications and what have you, we are digitizing a lot of things and what that brings to us is a cyber risk. As we keep digitizing more things, we get exposed to the criminals who have now put down the gun and have taken the computer and are robbing with it”.
Mr. Andor thus tasked insurance companies to exercise caution in their efforts to grow and develop the insurance market, particularly as they continue to digitize their records, exposing themselves to cyber risks.
Referencing the recent internet disruptions witnessed across various networks, he revealed that everything was at a standstill due to digitization.
“When I was coming it took hours for us to be checked in at the airport the internet was down, these are the risks we face with digitization, though it’s a good thing, it comes with its risks “.
He urged insurance companies to find ways to protect their data from cyberattacks, as the governing body prepares to issue a cybersecurity directive to regulate the insurance industry.
“I know some of you are putting controls in place to protect you, but the NIC is coming up with the cybersecurity directives, these are things you’re expected to do to protect the business because if you go down, the policyholders’ interest is jeopardized “
Regarding climate change, the Acting Commissioner urged insurance companies to strategize to address potential claims resulting from climate-related issues.
“We have been told that 2023, is the hottest year in the history of the earth and it is telling on everything we do as insurance companies.”
He also raised questions about rating evolving electronic vehicles, noting their different risk dynamics compared to fuel vehicles.
“How are we going to rate this electronic vehicle? Because their risk dynamics is not the same as the petrol vehicles, they don’t use engines, when you’re rating you use the CC capacity and all of that, but the electric vehicle don’t use CC capacity, they use batteries”.
“There are two major risks that are emerging that become important for us as insurance companies, businesses and managers to take note of. These are cyber risks and climate change risks. These may sound hifalutin and quite far from you, but it is very close”.
On his part, the Northern Regional Commissioner of Insurance, Joseph Akanlagm, emphasized the importance of collaboration between insurance companies and the NIC to maximize profits.
He assured attendees of more sessions with the commissioner in the coming months.
