There is a new drive to take advantage of growth opportunities in Africa, and this accounts for why many insurance companies across the world are making efforts to take a place in the continent.
African continent has over a 1 billion people in 54 countries and yet there are low levels of uptake in insurance among the low-income population. This state can be attributed either to the lack of knowledge about insurance products and to an extent misunderstanding of the concept of insurance accounts. Most Africans cannot afford insurance premiums just yet. Mostly is a choice between fulfilling a basic immediate need versus signing a long term beneficial need, in this case insurance. However, there are tremendous growth and opportunities which the continent has for the insurance companies, globally. Tapping into this industry, surely rewards the brave.
Africa has massive opportunities for life and on-life insurers and according to the insights gathered by Legato Consultancy, the following regions highlight the growth insurance market potential currently available in the Africa continent:
Angola: remains significantly underdeveloped and has immense potential for growth. Insurance is still dominated by the oil industry. It is expected that many people will be uplifted to the middle class as a result of the GDP and government’s enforcement of the compulsory 3rd party motor vehicle insurance.
Nigeria: 60 percent of insurance premiums are derived from the energy sector. Of the 169 million Nigerians in 2014, only 2.25 million had active insurance. The market is also dominated by 59 insurers all targeting the market share with penetration levels as far below as 1 percent.
Ghana: the insurance market is seen positive growth and upward trajectory, with business insurance and life insurance taking the lead. The country has 45 registered insurers with 19 operating in the life segment. The development of the oil and gas sector and a positive economic outlook set to boost the insurance industry. Funeral insurance remains largely untapped in Ghana and funeral costs in the country can cost up to $20 000 and averages about $6 000.
Morocco: has the second largest insurance market in Africa. 4 companies dominate the market underwriting 70 percent of the risks. 13 smaller companies share the remaining 30% of the market. The continued success of Morocco insurance industry is largely attributed to a well-developed banking system; government positioning towards foreign direct investment and also the government’s active role in encouraging foreign companies to set up offices in their country.
Egypt: despite a well-developed financial sector – insurance penetration rates still remain below 1% due to Islam being the dominant faith and growth in the private sector being stifled by the state owned enterprises.
Namibia: is among the better developed in Africa, boosted by foreign direct investment and a greater portion of wealthy citizens contributing to good sustainable growth.
