The fortunes of Insurance operators within the African region is set to brighten up after the deep economic recession that hit the regional economy between 2015 and 2016, which affected the insurance sector adversely.
This view was expressed by the Secretary General Africa Insurance Organisation (AIO), Prisca Soares at the 45th conference and General Assembly of the organisations held in Accra. Ghana.
Soares stated in the third edition of the African Insurance Barometer launched at the conference in Accra Ghana, that the continentâ€™s insurers are slightly more enthusiastic about the current state and outlook for their industry than in the preceding two editions.
According to her, in a survey conducted by her office on the state of the regional markets after the recession, the insurance executives polled for the survey, expect that the gradual recovery of the continentâ€™s economy from its deep recession in 2015 and 2016 will positively impact on insurersâ€™ rates and earnings and will ease the pressure from excess capacity and fierce competition.
â€œThis yearâ€™s Africa Insurance Barometer demonstrates that confidence is returning to Africaâ€™s insurance markets, she said.
Quoting from the result of the poll, Soares said: “According to the AIO members polled for this survey, policy makers and regulators pay greater attention to our sector while consumers have started to realise the benefits insurance offers in protecting their assets. Our industry currently accounts for insurance premiums of US$ 60.7 billion, which in US$ terms represents a decline over the previous year. However, in local currency, premium volume has not declined since 2011.
â€œIn fact, with the advent of new technologies and the ambition of our industry to create and deliver tailored products to clients continues to grow, our relevance as a key sector for the prosperity and progress of Africaâ€™s economies has greatly improved.
She noted that the underlying economic and societal fundamentals of Africaâ€™s insurance markets remained largely unchanged to last yearâ€™s survey.
Furthermore, she observed that abundant natural resources, the young and growing societies, an expanding middle class and the advent of new technologies have driven insurance demands in the continent adding that the recent economic recovery â€“ though still fragile in some countries has added further momentum to the continentâ€™s insurance outlook.
“As elsewhere, however, insurance markets suffer from excess capacity and cut-throat competition. As rates are low, regulators aim to protect domestic insurers from foreign competition with higher barriers of entry.
The continentâ€™s low insurance penetration is one of the marketâ€™s largest opportunities. With the economic rebound, insurers increased their efforts to broaden their product offering and widen distributionâ€, she stressed.
She said improved technology provides new avenues for innovation, both in commercial and personal lines, and helps to bridge geographical distances, increases scale and thus improves efficiency.