By Chiamaka Ajeamo, [email protected]
In the light of the crucial role the insurance industry plays in providing the framework for economic growth, the National Insurance Commission (NAICOM) has described Africa’s insurance markets growth as a necessity especially, with the presence of the Africa Continental Free Trade Agreement (AfCFTA).
The Commission has therefore, called on African governments to support the sector since the continent insurance market needs partnerships and collaborations to thrive.
Commissioner of Insurance, Sunday Thomas, made this call at a recent conference while charging the new president of African Insurance Organisation (AIO), Tope Smart, to work towards influencing governments across the continent to play more profound roles in providing the necessary support and create the enabling environment for insurance activities to boom.
Thomas also urged the AIO to persuade governments on the need to lift border barriers making movement of resources almost impossible and promote healthy competitions amongst member states. He also urged on the need to promote knowledge sharing across the continent among other objectives that will make insurance business thrive within the African markets.
Disclosing that the Commission has been able to get more support from the Nigerian government, he noted that this was the first time that any Nigerian President or Head of State will personally attend any programme of the insurance sector in Nigeria.
He further expressed excitement that not only was President Buhari paying attention to the sector, Vice President, Prof. Yemi Osinbajo, Minister of Finance, Dr Zainab Shamsuna Ahmed and other State Governors also did the same, as evidenced by their presence at the conference.
Thomas said: “The founding fathers of the AIO had a very thoughtful foresight by making sure we have this forum that has over these years had achieved tremendous success in harmonising the African insurance markets and bringing together experts of different insurance faculties annually to discuss burning issues affecting the continent and the rest of the world. I believe the outcome of all our deliberations in the last few days will go a long way in helping us thrive higher in achieving our goals and objectives”.
While congratulating Smart, he said: “I want to say to the incoming President that the journey ahead may not be all smooth especially due to the aftermath effect of the COVID-19 pandemic and the shapes of our economies across Africa presently. There is a huge task ahead of you and your team, but working with you over the years gives me
high confidence that you are equal to the task and I can vouch for your hard work, resilience, foresight and determination.
“I am sure we are all going to be proud of your tenure in the AIO. We will give the organisation the necessary support it requires as we have always done and in return, we expect that Nigeria as a member is going to reap all benefits of its membership in the organisation in line with the new strategic objectives of the AIO.
“It is worthy to say that the African insurance market is in dire need of serious collaboration and synergy now than in other time in the past as we rightly agreed here that we must look inward if truly we want to make an impact. Time has passed that we rely on foreign or international support from the west and other superpowers as the world at large is overwhelmed by so many issues.” Further charging the new leadership, he said that by the year 2022, when the AIO will celebrate its Golden Jubilee, having been established in 1972, he expects the president to write his achievements in gold for coming on board at this critical time.
“We expect to see great stride and landmark achievements when your tenure is over and the baton will change hands. I pledge the support of the Nigerian insurance industry to your success as President of the AIO”, he added.
On her part, the Commissioner of Insurance, Pension and Provident Funds Insurance and Pensions Commission, Zimbabwe, Grace Muradzikwa, while presenting a paper on ‘Regulation, Innovation and the Future of Insurance’ equally sought collaboration with other regulators across the continent.
Highlighting in-country and across jurisdictions, she maintained that the lowering of barriers has highlighted the interconnectedness of markets and the need for Regulators to collaborate and eliminate regulatory arbitrage.
In Zimbabwe, she said, they now have the Smart Regulators Forum where regulators meet to discuss cross-cutting issues.
Speaking on data protection and privacy, she said: “Regulators are concerned about how insurers are managing potential customer risks related to data sharing with third parties, therefore, developing data protection frameworks and collaborating with data protection agencies.
“On new sources of growth, one of the things I was taught, when I joined the insurance industry many years ago, was that there is a strong positive correlation between insurance growth and economic growth, though the causality relationship can be bi-directional. It is a chick and egg relationship. There is a lot of empirical evidence on the nexus between economic development and the development of the insurance industry. In my view, it is for this reason that insurers must not only take an interest in the economic growth drivers but be agents of economic growth. This is the only way that insurance will contribute towards the rebuilding of the continent.
“The world is now a global village, and, very soon, the AfCFTA will result in removing physical trade borders on the continent. It is coming and we must plan for enhanced cross border trade in insurance services, which is certainly expanding its scope beyond reinsurance as the only traditional cross-border product”, she expressed.
The newly sworn-in president of the AIO, Tope Smart, said his one year in office would focus on five major areas targeted at repositioning the African insurance market.
Smart , who is also the Group Managing Director of NEM Insurance Plc, highlighted these areas to include increased awareness, adoption of digitalisation, collaboration with other markets, partnership with government and regulators, and building customers’ trust.
According to him, the insurance industry in Africa had underperformed compared to other sectors such as banking, telecommunications. He vowed to change the narrative. Bemoaning the low performance of the African insurance market, he said, “Aside from South Africa, Morocco, Kenya, Egypt, Malawi, Zambia and Ghana, no other African country has been able to grow penetration to one per cent.”
He, therefore, called on all AIO members to work hard to ensure the situation changed for the better.