Insurance and re-insurance players in Africa expect further uncertainty for the remainder of 2020 and 2021 in view of Covid-19 impacts on businesses.
The position was unveiled at the launch of Africa Insurance Pulse with the theme, ‘Growth Perspectives Of African Re-/insurance Markets’, on Wednesday by the Africa Insurance Organisation (AIO).
According to the report, the COVID-19 pandemic posed severe challenges to Africa’s insurers, and in response to the various types of lockdowns and social distancing measures decreed by the African governments, players had to assure continued customer service, staff health, adequate liquidity management and operational resilience.
As in the past, this year’s 5th annual edition is based on diligent market research and in-depth interviews with insurer, reinsurers and brokers operating in Africa.
READ ALSO: Project Safeup to provide 2.5m free PPE to Nigerians
The Africa Insurance Pulse 2/2020 is sponsored by Africa Re, the leading pan-African reinsurance company and the largest reinsurer in Africa.
Jean Baptiste Ntukamazina, secretary General of AIO, said: “The COVID-19 pandemic has caught the global insurance industry largely unprepared. Those African insurance and reinsurance companies with a strong capital base and the ability to distribute their products digitally were better equipped to weather the impact of the pandemic. This will enable them to capitalise faster on the business opportunities arising after the crisis.”
He said the combination of both factors protected them against the worst effects of the crisis and enabled them to maintain their client relations even during lockdown periods or in a social-distancing environment.
“As these insurers strengthened their market position during the pandemic, they will be even stronger in capturing those business opportunities, rising in the future.”
Regulators he said, on the other hand, focused on protecting African policyholders following the outbreak of the pandemic. At the same time, they encouraged re- /insurers to pay claims promptly. Those re-/insurers operating according to risk-based capital regimes were better prepared to deal with the COVID-19 crisis.
Corneille Karekezi, group managing director/ CEO, Africa Re said: “Insurance regulation in Africa has significantly improved in recent years. Various regulators have pushed ahead, mandating the implementation of risk-based capital schemes or capital increases, as well as improved operations and risk management. At the same time, we witness rising protectionist efforts to retain insurance and reinsurance premiums locally.
“Regulators should assure that in particular in times of economic distress, insurers have access to the highly-rated risk capacity and expertise that well-diversified reinsurer provides. Indeed, some recent catastrophes, including large natural catastrophes or manmade 2 claims in South Africa, Cameroon and Lebanon, and in addition to the threat presented by COVID-19 potentially related claims remind us that some exposures can quickly exceed local capacity.”
Karekezi said the pandemic will change the African insurance landscape & reduce top-line of insurers. Senior executives predict that COVID-19 will lead to an accelerated consolidation of Africa’s insurance industry, eliminating those companies with limited resources and fragile processes.
