By YEMISI IZUORA
The presence of numerous untapped markets is one of the key factors driving the insurance industry in the African region.
However, there are a few developed markets, such as South Africa, which are highly competitive due to the presence of well-capitalized local players. Key players from the global market seek to exploit these untapped regional opportunities, along with exploring ventures in concentrated markets.
The African region consists of several underdeveloped and developing economies, with the insurance industry remaining largely staggering in terms of growth. However, overall economic growth in the region witnessed over the past decades is steadily creating growth opportunities for the insurance market in the region.
The Africa insurance market size reached US$ 81.6 Billion in 2022 and the International Market Analysis Research and Consulting Group (IMARC Group) a leading advisor on management strategy and market research worldwide expects the market to reach US$ 123.8 Billion by 2028, exhibiting a growth rate (CAGR) of 7.1 per cent during 2023-2028.
Oriental News Nigeria, understands that a significant rise in literacy levels, coupled with the increasing number of educated youths, is creating a positive outlook for the market. An overall improved educational scenario is expected to create significant awareness regarding the associated benefits of insurance, thus creating lucrative opportunities for the market players.
Equally, rapid urbanization, emerging middle class, and growing working population, along with improving internet connection and technological advancements, are some of the other factors catalyzing the growth of the insurance sector in the African region.
Hosting the 2023 edition of the West African Insurance Companies Association (WAICA), conference in Nigeria a country considered a hub of insurance business given its population size, is strategic given its leadership position in Africa.
At the opening of the event on Monday in Lagos, the country’s commercial nerve center, the Minister of Finance, Budget & National Planning, observed that the continent’s insurance industry is in a parlous state.
The Minister, Mrs. Zainab Shamsuna Ahmed, observed with concerns the perilous development of insurance in the whole of Africa which she said has been characterized by low penetration and poor contribution to most African countries financial growth.
Ahmed, therefore challenged industry heads to rise to the challenge and be innovative so as to maintain efficient, fair, safe and stable insurance market in the West African sub region for the benefit of the policyholders and other stakeholders.
While applauding the gathering of delegates from the West African Sub Region and beyond to the West African Insurance Companies Association Educational Conference 2023 and celebration of its 50th Anniversary, Ahmed, recalled that in the year 1973, the founding fathers created the WAICA, with the purpose of improving the image of the insurance industry in West Africa, whilst assisting in establishing an enabling environment for industries and economies by promoting cooperation in every respect amongst all the insurers and reinsurers companies operating in its sub-region.
She noted that in modern business environment, disruption plays an integral part of any business, thus the 2023 WAICA Educational Conference choice of theme: “Repositioning the Insurance Industry in West Africa for Global Competitiveness” could not have been more propitious.
This she said is because the overarching objective behind the African Continental Free Trade Area (AfCFTA) is to accelerate intra-African trade by providing a single market for goods and services, facilitate movement of persons in order to deepen the economic integration and prosperity on the Continent as well as boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.
This is in addition to the urgent need to establish high quality insurance database to provide a holistic view of the industry’s operations in the sub-region and the need for WAICA members to leverage technology and other alternative distribution channels in order to increase market penetration and the importance of enhancing multilateral cooperation with the objective of promoting international standards in fostering favourable investment environments and orderly markets in the West African sub region and beyond.
The Minister stated that the insurance industry, like other components of the financial system, is changing in response to a wide range of global social and economic forces, adding, “In particular, insurance and insurance-linked financial activities are increasingly crossing national and sectorial boundaries. Consequently, it has become imperative for the Insurance supervisory systems and practices to continually upgrade in order to cope with these developments to mitigate possible financial and systemic stability concerns arising from the insurance sector as they emerge.”
Speaking further she said, “At this juncture, I am pleased with the not so recent stride so far achieved by the West African Insurance Supervisors Association (WAISA) with regards the establishment of the College of Insurance Supervisors of the West African Monetary Zone (CISWAMZ) in February, 2022.
The college is saddled with the objectives of strengthening cross border insurance supervision through, Creation of an enabling environment via synergies for the insurance sector to flourish; Harmonization of regulatory standards and Increasing operation of cross border network by branches and/or offshore subsidiaries in the insurance sector.
The College’s other responsibilities include, Enhancing solo supervision of insurance entities by the competent authorities; Facilitating group wide supervision and Minimizing fraudulent activities in the insurance sector in accordance with the Financial Action Task Force (FATF) principles on Anti-Money laundering amongst others.
The Minister said that as an optimist, Government is encouraged to believe in a new dawn, leveraging technological innovations, and a positive paradigm shift focused and poised to meet the anticipated surge in the demand and untapped side.
“I therefore urge the delegates here present to deliberate and recommend ways of repositioning the insurance industry in West Africa for Global Competitiveness.
Finally, I wish to congratulate all WAICA delegates on the occasion of the Association’s 50th Anniversary (Golden Jubilee) and hereby formally declare this years’ conference open.” she concluded.
NIA Predicts Bright Future
However, despite the challenges the Nigerian Insurers Association, NIA, predicted a boom in Africa’s insurance sector, given new deals and exposure which the WAICA will create among industry operators.
In his goodwill message at the opening of the conference Olusegun Omosehin, Chairman of the Association, said that it is a significant occasion for not only for the industry but for the region, as it provides a vital platform for stakeholders to come together, share experiences, and chart a course for the future.
He said that as the Chairman of the Association, he is proud to see Nigeria
taking the lead in organizing this important event, WAICA@50.
“Our commitment to excellence, innovation, and professionalism is reflected in the
way we have prepared for this conference, and I am confident that it will be
a resounding success.” he added.
Omosehin, while speaking further, said the theme of the conference, “Re-Positioning the Insurance Industry in West Africa for Competitiveness” is both timely and relevant as it underscores the need for everyone to embrace and drive growth and innovation of the insurance sector in the Region.
He said, “I have no doubt that the discussions and insights that will
be shared during this conference will help to shape the future of insurance in
West Africa and beyond.
“I want to extend my gratitude to the Local organizing Committee, sponsors,
CEOs of Insurance companies and other stakeholders who have made this
conference possible. Specifically, I would like to thank the Commissioner for
Insurance & the National Insurance Commission – NAICOM for sponsoring the
Pre-Conference Cocktail. Your support and collaboration have been critical
to our success, and I look forward to continuing our partnership in the years
ahead.”
In his comments, the Vice President of the West African Insurance Companies Association (WAICA), Eddie Efekoha, expressed the confidence that the 2023 conference will go a long way in addressing the issue of Rating of insurance companies in West Africa to reposition them for global competitiveness in the full realization that insurance is a global business.
Efekoha, said the theme of this year’s Conference which is: “Re-positioning the Insurance Industry in West Africa for Global Competitiveness” aptly captures the industry’s thoughts and expectations while the resource persons have been carefully selected to address the issue in a manner that presents all shades and perspectives.
He expressed optimism that the learnings stakeholders will take from the conference will make them better managers that will reposition insurance institutions across the subregion and make the competitive globally, as he believed that they will leave the conference with very fond memories of their brief, but eventful stay in Nigeria.
“As you all know, WAICA is the umbrella Association of insurance, reinsurance, and insurance broking companies in the West Africa and over the years, WAICA has provided the platform for us to enrich our knowledge of insurance, share business information and network as insurance players in the sub region.”
“We want to sincerely appreciate the Hon Minister of Finance, Budget and National Planning, Dr. Mrs. Zainab Shamsuna Ahmed for taking time out of her usually very tight schedule to be part of this event. It bears eloquent testimony to her passion and interest in the insurance industry, and it is important to note that your support since assumption of office has been immense and very profound.”
“Let me also acknowledge the support of the Commissioner for Insurance, Mr. Olorundare Sunday Thomas who has been a source of inspiration and support to WAICA over the years.” he added.
