Oil fall: Africa Insurers urge to proffer solution to continent woes

The President of Africa Insurance Organisation (AIO), Mrs. Lamia Ben Mahmoud, on Monday challenged operators in the African continent to proffer solution to the disfavoured economic situation in the continent owing to the fall oil price.

L-R: Out-going Director General Chartered Insurance Institute of Nigeria (CIIN), Mr Kolawole Ahmed; Commissioner for Insurance, Mohammed Kari; Chairman of Prestige Insurance Brokers Limited, Prince Feyiseyo Soyewo and Director General Alpha Assurances, Mr. Youness Rhallam at the opening of the on-going 43rd AIO conference holding in Marrakech Morocco.

Mahmoud, while presenting her welcome remark at the on-going Africa insurance Organisation Conference in Marrakech, Morocco, said that the situation has continued to affect the insurance sector tremendously.

She stressed that situation has continue to make insurance penetration a hard nut to crack in the continent.

“Within the past decade, she said that the continent has been hit by some major challenges which have to a large extent disfavoured economic growth and affected the insurance sector tremendously.

“Here, I am referring to the recent drop in fuel prices, in fact, the price per barrel in January 2016 stood at approximately a quarter of its market value two years ago, and at the lowest point since 2003.

“On the list of challenges could be added cyber criminality, political instability, insecurity with some new waves of terrorist attacks, climate change, food security challenges for the continent’s population tomorrow etc.

“We still suffer from a shortage of skilled and experienced insurance professionals, as a result, large and complex risks are not retained within Africa, but are ceded to foreign insurance markets because specialist risk management capabilities and high quality security are not sufficiently available leading to a consequent premium flight which threatens the viability of the domestic insurance industry. There is still wide spread ignorance on the benefits of insurance.

“Added to this list is an acute insufficiency of product differentiation.”

Mrs. Lamia Ben Mahmoud, therefore called on companies to act to promote expertise.

“We emphasise in this area on the need to strengthen the diversification of training in scientific and technical issues by leveraging new tools and instruments imposed by the development of technology to ensure greater communication of their knowledge and know-how.

“The challenges are many and daunting; especially in a context where the one size solution is outdated as customers now expect personalized insurance solutions.

“It is true that some of the solutions to these problems require a multidimensional approach with the input of other key actors required.

“We must play a frontline role in the quest for solutions to these challenges. We have a number of factors that militate to our favour notably Africa’s favourable demographics and wealth of natural resources (including 60% of the world’s uncultivated arable land), there is an enormous growth potential. The operating environment is becoming more favourable – increased stability and improvements in transparency and the rule of law are all contributing to a growth in regional insurance practices.

“This is shown in the high rate of market liberalisation that has been seen across Africa, as insurance companies have successfully lobbied governments to allow private entry into the previously state monopolised sectors in many countries. Insurance market liberalisation has been proven to have considerable positive effects on economic health.”

Despite the disturbing scenarios in some parts of the continent, the AIO President, however expressed optimism believing that the future is not all that bleak, reason why the industry begins to look at Insuring Africa’s future amidst current and emerging challenges which is the theme of this year’s conference.