Insurers in Africa urged to embrace, utilise ICT
Friday February 16 2018
Sluggishness in embracing digital technology has slowed the competitiveness of the insurance sector in Africa. FOTOSEARCH
Significant disruptions in the insurance industry in Africa have held back the value of contracts with African Union chairman President Paul Kagame saying they reached $75 billion a few years ago.
The number reflects a tough business environment for insurers in the continent even as officials from German’s Reinsurance Company, Munich Re, say the global premium volume reached $5 trillion in 2016.
The re-insurer projects the value to settle at $5.6 trillion in 2018, driven by recovering economies in a number of large-volume emerging markets.
African insurers were urged to embrace digital technology as a way of driving growth of the industry at the 42 annual general meeting for the Federation of African National Insurance Companies (Fanaf), held recently in Kigali.
A sluggishness in embracing digital technology has slowed the competitiveness of the insurance sector in Africa.
Peter O Angweny, manager life business department at Kenya Re, said the industry is still stuck in the old ways of doing business, which has slowed service delivery.
The other challenges facing the insurance sector are lack of innovative solutions, limited financial competency and insurance awareness.
The industry also lacks suitable and appropriate products for different market segments, while cut-throat methods and underpricing limit growth of profits.
Until these challenges are addressed the insurers said the share of the continents’ premium value will remain low.
However, President Kagame sees some of the challenges as an opportunity to drive growth of the insurance contracts and increase penetration rates, which remain low.
“The barriers hindering growth and scale of trade in Africa are about to get smaller because of the Tripartite Free Trade Area Agreement, which will be signed in Kigali next month,” said the president.
The Tripartite Free Trade Area Agreement brings together members and partner states from the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community.
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