Technology Facilitating Insurance Industry Growth in Africa
| date: August 7th, 2017
Africa’s insurance markets continued to expand despite the economic downturn witnessed in 2016. This is according to a recently market survey, The Africa Insurance Barometer 2017 published by Africa Insurance Organization (AIO) which conducted interviews of 29 senior executives of regional and international insurance companies and intermediaries.
The executives interviewed attributed the resilience of the African markets against the global economic headwinds to several factors including; a young, growing and more affluent population, greater awareness and understanding for insurance products, improved regulation, investments in infrastructure, exploitation of the continent’s raw material and new technology.
While these factors contributed to the growth of both personal and commercial insurance lines, insurance uptake remains low on the continent due to a high poverty rate and lack of capital and expertise within insurance companies that would help tap into the market. Ineffective legal, judicial and regulatory systems coupled with immature financial markets and a pervasive informal economy were also cited as contributing to the low insurance penetration.
On the flip side, low insurance penetration is considered the market’s greatest strength presenting high growth potential for those able to access the untapped corporate and retails consumer base. Insurers are already capitalizing on the widespread adaption of technology and high mobile phone penetration rates to enhance their product base and distribution channels.
Those interviewed identified new technology as not only helping grow the demand for insurance but broadening the spectrum of insurance products from agricultural insurance to micro-insurance and new offerings across personal lines. Technology was also cited as having helped enhance efficiency by enabling insurer be able to conclude contracts, receive premium payments and make claims payments and facilitated access to Africa’s large client segments living in remote areas.
The report quotes Corneille Karekezi, CEO Africa Re Nigeria as saying;
“Technology will have a massive impact on the whole insurance value chain, including, but not limited to customer acquisition, product distribution, pricing, risk management and predictive analytics. The technological revolution will also require a new understanding of traditional risks, such as motor, and emerging risks, such as cyber.”
You can download the report below to read more on the current state and future prospects of the US$64 billion African Insurance market.
Download The Africa Insurance Barometer HERE