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KIGALI, June 15 (Xinhua) -- Africa needs favourable insurance regulation to enable the growth of insurance market on the continent, said panelists at the 40th Anniversary Symposium and the General assembly of the African Reinsurance Corporation (AfricaRe).
Rwanda hosts AfricaRe which is under the theme: "Can Africa Lead the World? Practical Steps and Solutions to Achieve World Leadership".
Speaking at the meeting that brought together about 200 participants from Africa and beyond, Moulay Hafid Elalamy, minister of industry, trade, and new technologies of Morocco said that unfavorable insurance regulation policies have hindered the growth of the insurance sector in Africa.
"Lack of reliable data and statistics, low capital requirements, as well as limited enforcement of regulatory provisions have been identified as major draw backs and key challenges to the growth of African insurance market," he noted.
Elalamy highlighted other challenges facing the industry as inadequate enforcement of compulsory insurances, failure by the government to lead by example in patronage of the industry, inadequate budgetary provisions for the insurances of government asset.
Only 3.5 percent of the African market is insured, indicating a vast opportunity for insurance firms, according to World Bank.
According to Dr. Martyn Davies, managing director, emerging markets and Africa, Deloitte, an absence of information on the insurance market in Africa is a main source of reluctance for insurance firms wanting to tap into the continent's potential market.
Davies stated that despite its importance for economic development, the majority of African countries lack access to insurance products.
Insurance penetration in Africa is still very low at 2.9 percent of GDP, meaning that African governments have not significantly embraced insurance in their economies
Africa's most attractive insurance markets have seen the entry of foreign players that generally create their subsidiaries from scratch, or simply acquire an existing local player.
"Most Africans still just struggling to meet their basic food and other day-to-day needs, insurance is still a long way off," said Claver Gatete, Rwanda minister of finance and economic planning.
"We should look at insurance needs for goods traded across borders to facilitate regional and international trade."
Gatete stated that demand driven insurance is not enough, there is a need to address supply side by massive sensitization and introduction of new products.
African insurance premium volume in 2014 totalled 69 billion U.S. dollars down from 72 billion U.S. dollars in 2013. Life insurance accounted for about two thirds of the 2014 total, with non-life insurance accounting for the rest.
In 2014, the 10 largest markets South Africa, Morocco, Egypt, Nigeria, Kenya, Algeria, Angola, Namibia, Tunisia and Mauritius generated premium of 63.4 million U.S. dollars of insurance premiums. Enditem
