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A Peek Into The AIO Conference In Jo’burg

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In this report, ZAKA ABD-KHALIQ, examines the scenarios that played out at the 46th African Insurance Organisation (AIO) in Johannesburg, South Africa, where the main theme of the conference was ‘Insurance Penetration In Africa: Insuring the Uninsured.’

In spite of the challenges of securing visa by some delegates, mostly Nigerian delegates, to the just-concluded 46th African Insurance Organisation (AIO) in Johannesburg, South Africa, the four-day conference could be regarded as a success.

The registration was a top-notch, coupled with ambiance of the city of Johannesburg, which makes the whole experience, a memorable.

The speakers which ranged from regulators to operators and other stakeholders performed up to expectations in handling their respective relevant tasks.

Although, in the end, it was a tragedy for Nigerian contingent at the conference, as we lost the deputy director-general, Chartered Insurance Institute of Nigeria (CIIN), Mrs Uju Ndubuisi Chukwu, to the cold hand of death in South Africa. Nigeria can take solace in the fact that the country is hosting the next edition of the conference taking place in Nigeria next year.

With insurance penetration very low across most African countries, the focus of the outgone conference theme, ‘Insurance Penetration In Africa: Insuring the Uninsured’ was very apt.

The speakers advised regulators across countries in Africa to open up several channels while urging governments across the continent to support insurance penetration through friendly fiscal policies.

The operators, on the other hand, were advised to embrace technology, which is cost effective to deepen insurance penetration on the continent.

African Insurance Premium

Nigeria, Morocco and other African countries were able to generate $67.7 billion insurance premium income in their 2017 financial year end.

According to the 4th Africa Insurance Barometer, a research report on African insurance industry, launched at the 46th Conference & General Assembly of the African Insurance Organisation (AIO) in Johannesburg, South Africa, premiums grew by 12 per cent in US-dollar terms in 2017 financial year, from $59.4 billion in 2016, reversing the trend of previous years when African growth rates were negative due to depreciation of African currencies.

Morocco led in Africa with 20 per cent of the continent’s premium, followed by Kenya who has 11 per cent, while Egypt came third with eight per cent premium generation. Algeria generated six per cent as Nigeria and Namibia recorded five per cent premium each, even as Angola and Tunisia followed with four per cent premium each. Zimbabwe, Côte d’Ivoire, Mauritius, Ghana and Botswana has three per cent premium income each. With Tanzania recording two per cent, the other African countries jointly generated 20 per cent premium in their 2017 financial year.

On an inflation adjusted-basis, the report said, overall insurance premiums increased by just 0.5 per cent in 2017, which was ahead of the growth in advanced markets (-0.6 per cent), but below the 10.3 per cent volume growth for the world’s emerging markets.

In Africa’s largest insurance markets, total real premium growth was positive in Egypt (+9.8 per cent), Namibia (+7.8 per cent) and Morocco (+3.0 per cent), stagnant in South Africa (+0.1 per cent) and negative in Nigeria (-10.5 per cent), Algeria (-2.8 per cent) and Kenya (-2.0 per cent).

The continent’s insurance markets, according to the research report, have returned to a more stable environment following the deep and sudden economic downturn in 2015/16.

The annual survey conducted among the CEOs of Africa’s primary insurers, stated that  the industry continues to benefit from its underlying growth story, the resilience that it demonstrated during the downturn and a strengthening regulatory framework.

The findings of this year’s African Insurance Barometer confirmed that insurance markets in Africa have returned to a more stable environment following the 2015/2016 deep and sudden recession.

Africa’s insurance industry, it said, continues to benefit from its underlying growth story, the resilience that the industry has shown during the downturn and a regulatory framework that contributes to strengthen the industry’s security.

Challenges, it stressed, remain and access to skills and talent have turned into a major stumbling block for the further development of Africa’s insurance industry.

For the first time, all interviewees, in the research work agreed that a lack of talent limits their ability to innovate, escape pricing pressure and commoditisation, expand distribution, improves risk management and rejuvenate management. At a time when technology and the need to upscale and efficiency motivates insurers to consider regional expansion, protectionist tendencies and a lack in regulatory coordination or harmonisation threaten to hold back development.

Technology and new product development, it said, are seen as the key opportunities to access and appeal to new customers, both in commercial and personal lines and therefore address the continent’s low insurance penetration

Reacting to the report, secretary -general of the African Insurance Organisation, Prisca Soares, said, the mood among Africa’s insurance executives polled for this year’s Africa Insurance Barometer is slightly more cautious than last year.

According to her, “Following the deep recession of 2015/16, insurers are less bullish. The crisis exposed Africa’s continued vulnerability to external shocks. In addition, the prospects for the global economy and for global trade have reduced for the near-term future. However, with the availability of technology and an expanding middle class, awareness and the understanding for the benefits of insurance are improving among policymakers, regulators and consumers.

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