By The National Insurance Commission (NIC) has raised alarm over the recent upsurge in fraudulent activities and its detrimental impact on the insurance sector.
the Acting Commissioner of Insurance, stressed that insurance fraud poses a grave threat to the industry, potentially leading to significant financial 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 urged insurance companies to proceed with caution as they strive to expand and enhance the insurance market, especially as they increasingly digitize their records, thereby exposing themselves to cyber risks.
Pointing to the recent internet disruptions observed across various networks, he highlighted that digitization had brought everything to a standstill.
“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 “
Concerning climate change, the Acting Commissioner urged insurance companies to develop strategies to handle potential claims arising 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 concerns about assessing the risk of evolving electronic vehicles, highlighting their distinct risk dynamics compared to traditional 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.
