African Insurers: Technology, innovation, data critical for future growth
As African insurers overhaul its 50 years of existence as a body and the challenges that have confronted its growth, they have noted that technology, innovation and data are key focus for growth going into the future.
Tope Smart, president of the African Insurance Organisation (AIO) speaking at the ongoing 48th Conference and General Assembly of the body in Nairobi, Kenya on Monday said the African insurance industry remains one of the least penetrated in the world, but with significant scope for growth.
According to him, Africa’s average insurance penetration remains comparatively low at around 2 percent in 2020, measuring well below the global average of around 7 percent.
On the Conference theme ‘The AIO At 50: A Call For African Insurance Renaissance’, Tope Smart, who is also the GMD of NEM Insurance Plc said, while the continent has grappled so much with low awareness, low-income levels, inappropriate pricing, inadequate distribution channels among others, it is time to move on for better impact on development of the continent.
According to him, growth opportunities in the African continent remain high, largely driven by a young and growing population with increasing utilization of technology.
He said despite the additional pressures of unrelenting regulatory and insurance accounting changes, and the huge costs associated with the changes, there are also some positive developments and opportunities for growth.
“The younger generation is looking for new ways to connect and protect, bringing affordability and access to the continent. These market conditions and dynamics are likely to continue to give rise to Insurtechs who, through technological innovation, are able to tackle consumer awareness and resistance and address inefficiencies within the financial system for product development, distribution, and settlement, Smart stated.
Listing the focus into the next 50 years of AIO, he said the insurance industry in Africa is undergoing a period of significant change and disruption.
“It is now evident that technology is playing a major role in this, with new companies and business models emerging that are challenging the existing ones. The technological advancements in information management tools and mobility have paved the way for a new era in the African insurance industry.”
“Consumer behaviour is ever changing, and this constantly puts pressure on insurers to adapt and innovate if they are to stay relevant.”
“Nonetheless, the future looks bright for the African insurance industry, and it will be fascinating to see how it develops over the coming years. One way, amongst many others, in which technology is shaking up the status-quo is through use of blockchain. This distributed ledger technology has the potential to provide a more robust and efficient infrastructure for the industry, improving transparency and reducing costs.”
On education and training, there is an existing gap between academia and the professional world, which needs to be bridged. There are many questions regarding education and training in the African insurance industry, which need to be addressed he said.
“Given the changing needs of learners towards more flexible training regimes, coupled with the need to improve the quality of insurance education in Africa and make it Africa relevant, there is the need for changes to insurance training and capacity building systems in Africa. This underscores the need for collaboration among the various insurance training institutions across Africa towards standardization of insurance training in the continent.”
He therefore that there is a vital responsibility on the shoulders of the AIO to lead the action towards a synergized African insurance industry, working towards standardization and harmonization within the African insurance industry.
“We have the lessons of the past to guide us and there is no better time to start than now, right here, as we discuss the renaissance of the African insurance industry.”