Leading insurers and reinsurers have observed that bringing young blood in the industry would help to drive growth in the industry especially in Africa.
Talking exclusively to Commercial Risk Africa as part of a roundtable at the 44thAfrican Insurance Organisation General Assembly in Kampala last week, a group of brokers, insurers and reinsurers from across the continent and Europe warned boardrooms need to make themselves future fit if they are to survive.
Understanding the new world order, bringing in younger voices and being alive to new risks are all crucial to remaining relevant and ensuring insurance has a place in the commercial world.
“Entrepreneurship and innovation can make a change,” said Lukas Mueller, head of North & Sub Saharan Africa at Swiss Re, “but we need to take a much longer horizon.”
Delphine Traoré Maïdou, COO and member of the board of management for Africa at Allianz, said it will be critical to see how the youth views politics and business alike.
“We know Africa has the fastest rate of urbanisation and the youth is growing at a fast pace, but the youth are looking very differently at politics and business,” she explained.
“We need them to challenge our current leaders. If we talk about what 2050 might look like, we cannot keep that conversation to ourselves. Younger people must be involved and challenge our thinking.”
Communication and connections are both changing fast, particularly among Africa’s youth, said Mr Mueller. But there are challenges.
Nobuhle Nkosi, head of financial lines at Allianz Global Corporate & Specialty Africa, warned of the cyber risks that are still not being taken seriously enough. In the wake of the WannaCry ransomware attack, she expects a surge in interest in cyber insurance but warned that awareness of the problem is still not universal.
Again, in an example of how older leadership thinks very differently to its younger staff members, cyber threats are better understood by younger people, simply because they understand how systems work.
Too often, agreed the roundtable participants, older people will lose passwords, or even not use passwords, leaving their systems wide open to attack.
A question that had been raised in Commercial Risk Africa’s Risk Frontiers Africa 2017 survey was whether the insurance industry had sorted itself out in terms of cyber insurance policies.
The roundtable participants felt policies do exist and there is now sufficient capacity, however they acknowledged the WannaCry attack could prove to be a test for the market in terms of how it responds.
There was also some relief that claims are likely to be relatively low, even though African countries were targeted. Hoping it can prove to have a positive outcome, they agreed with Ms Nkosi that the best result is that it has raised awareness among corporates, particularly at board level, and that it boosts the cyber insurance market.
Thusang Mahlangu, CEO of AGCS Africa wanted to know what the insurance market is doing to promote cyber products among corporates. He asked: “How do we get clients to understand first-party exposures? Maybe we need to take the conversation to the younger people within the business?”
One London market broker told the group: “It is not just about the obvious denial of service issues. But what would the environmental consequences be if, say, a valve on an oil pipe was reset by hackers and oil spilled out?”
The group agreed that talking simply to IT experts is not enough as they do not necessarily understand the wider liabilities, and Ms Traoré Maïdou added that one of the ongoing problems is that “risk is still seen as a cost centre”. She added: “Cyber insurance is not cheap as insurance companies are charging quite a bit of money for cover. So how do risk managers sell this type of insurance to their boards?”
Shaibu Ali, CEO at Ghana-based Kek Insurance Brokers, agreed saying it is a particularly difficult sell in markets like Ghana and Nigeria, where awareness of the problem remains low.
The only benefit for some companies is that much of their work remains manual, as investment in technology has been relatively slow. He believes, for example, this maybe why hospitals in Ghana were not affected by the WannaCry attack – records are still on paper.
Grace Muradzikwa, CEO at Zimbabwe-based NicozDiamond Insurance, however, believes change is happening and events like WannaCry will speed up the process.
“Risk is now a topic in most boardrooms,” she said. But she warned: “A lot of insurance leaders are not building for the future. We need to be IT-enabled to look after future clients, but we are still looking at issues manually.
“We need to build sustainable business models in which we cater to our clients and to do that we need to understand the risk matrix.”