Digitalisation to make insurance products attractive, affordable for Africans

The digitisation of Africa’s insurance markets will enhance the appeal and affordability of risk transfer products in the continent, according to Africa Insurance Pulse report of the AIO launched recently.

According to the report, underwriting and risks management will benefit from improved access to data and analytics. At the same time, technology will help streamline the insurance value chain and enhance the efficiency of administrative processes.

Ultimately, digitisation will boost awareness and demand for insurance solutions, eventually translating into higher insurance penetration in Africa.

These are some of the key findings of this year’s edition focused on the digitisation of Africa’s insurance markets, according to the report by Faber Consulting on behalf of the African Insurance Organisation (AIO), being the fifth in the series.

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This edition has been exclusively sponsored by Africa Re, the leading Pan-African reinsurance company and the largest reinsurer in Africa.

Jean Baptiste Ntukamazina, secretary-general of AIO, said: “During the Covid-19 crisis, digitisation in Africa, as in other economies, has demonstrated its benefits.

“While regulators and policymakers recognised the systemic nature of the insurance industry, the industry demonstrated its ability to continue to provide its services to policyholders without any disruption.”

Ultimately, this will reflect in an acceleration of the application of the new technology across Africa.”

Corneille Karekezi, the group managing director/ CEO of Africa Re, stated: “We are seeing pronounced differences in the degree of digitisation across African insurance markets and its players. At Africa Re, we are keen to promote, accompany and support the digitisation of our core markets. The advanced technology helps insurers to access new client segments, improve their services and differentiate their products to overcome the focus on pricing that has eroded many of our markets in the past years.”

“The Africa Insurance Pulse is based on a combination of in-depth market research and valuable insights from senior insurance executives operating across Africa,” commented Henner Alms, chairman and Partner at Faber Consulting. “The study found that currently approximately 5 percent of insurance premiums are already generated digitally. In the long term, this share could rise to 20-50 percent of premiums.”

In Africa’s frontier markets, the introduction of digital technology contributes to advance administrative processes and improve risk management. In more advanced markets, such as Kenya,

Nigeria or Ghana, digital products are already sold via mobile platforms and the technology helps to finally curb down on the sales of fraudulent motor policies. Personal lines are expected to be digitised first, followed later by commercial lines and then specialty lines.

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