Insurance companies in the West African subregion have been advised to reduce capital flight in the region and ensure full utilisation of the local reinsurance capacity in their area.
This has become necessary if the region must achieve its long term growth plan and compete effectively with its peers in other emerging markets.
Femi Oyetunji, managing director, Continental Re’s made this remark during the West African Insurance Companies’ Association educational conference, in Freetown, Sierra Leone.
He said, “In West Africa, there is need to tackle and stem capital outflows through developing higher local retention capacity, and insurers should ensure full utilisation of local reinsurance capacity including pursuing pooling option.”
Oyetunji disclosed that the total premium earned by the West African insurers in 2011 was $2.5 billion. He urged the insurers to diversify branch networks across regional markets, leverage on WAICA for involvement and participation in regional trade discourse, and engage authorities to propound harmonisation of legal and regulatory frameworks.
According to him, encouraging trade liberalisation of markets for easier cross border trade in insurance was relevant.
He said that insurers should promote the consolidation of markets for diversification and expansion of scope and scale.
The reinsurer urged underwriters to buy expertise across diverse disciplines, instill appropriate insurance skills in them, train and continue to retrain their best talents.
According to him, there is need for underwriters to confront parochial and artificial regional political barriers that constrain cross border trade and their access to larger markets. The region, he observed, was still fraught with challenges that must be overcome if the underwriters are to win in the new globalisation dispensation.
Oyetunji said, “We must embrace technology and look outside the insurance world for growth inspiration solutions. We must institute international best practices across all facets of our operations.”
He urged them to borrow from emerging and developing market experiences, to study, customize and structure products for local environments; to adopt partner distribution, underwrite, price, and adopt business administration technology and management strategies.
While stressing the relevance of technology, he said that insurers should adopt mass marketing techniques and experience penetration strategies, build new revenue streams through mobile commerce, mobile distribution, selling, paying and transaction systems.
