By Henry Uche
The Africa’s average insurance penetration rate dropped from 2.78 per cent in 2019 to 2 per cent in 2020 . This is even as the global average penetration rate was 7.20 per cent in 2019 and went up to 7.40 per cent in 2020 , according to the President of African Insurance Organisation (AIO), Mr. Tope Smart.
Speaking at the Insurance Retreat for Africa, organised by the government of Zanzibar, recently, at Madinat el Bahr, Zanzibar, in Tanzania, the president of AIO, Tope Smart, said: “In 2019, while the global average penetration rate was 7.20 per cent, that of Africa was 2.78 per cent. In 2020, while global average went up to 7.40 per cent, that of Africa came down significantly to about 2 per cent. This should be of great concern to us as a region.”
He attributed the low insurance penetration on the continent to low income, low awareness level, failure to embrace digital technology, high level of financial exclusion, lack of infrastructural & distribution channels, lack of domestic skills and a shortage of data, even as insurers also battle brain drain. He stated that regulators were not keeping pace with innovation, as timing and implementation of regulatory changes need to be looked into, he stressed that, lack of consumer trust as presence of weak companies erode trust, pricing and other market related issues, cultural related issues, fragmentation and over competition, were hindrances to the insurance penetration on the continent.