The 42nd Annual General Assembly of the Federation of African National Insurance Companies (FANAF) kicked off today in Kigali with the call to increase insurance penetration in Africa.
Held under the theme “The African Insurance facing Disruptions,” the three-day conference brings together more than 800 eminent personalities, insurers, reinsurers, experts and other stakeholders in the sector from Africa and beyond to discuss key challenges and opportunities in the insurance sector in Africa.
Officiating at the 42nd FANAF’s General Assembly, President Paul Kagame pointed out that there is clearly a huge opportunity for future growth, particularly as Africa’s middle class expands faster than anywhere else.
“Africa’s national insurance companies, represented by all of you here, will be the drivers of that expansion as well as the natural partners for international firms looking to enter our market. We should work closely with others, but that does not mean African insurers should take a subordinate role. Second, the barriers hindering the growth and scale of trade in Africa are about to get smaller,” President Kagame told African Insurers.
Currently, the insurance industry in Africa represents only about 1.5 percent of insured catastrophe losses worldwide, although the continent is home to 16 percent of the global population. In 2015, the value of insurance premiums in Africa amounted to be around US$ 75 billion. As a result, insurance penetration in Africa as a percentage of gross domestic product, is several times lower than in other emerging and developed economies
Some of the key challenges faced by the insurance sector in Africa include; low levels of ICT and other innovative initiatives, limited financial education and insurance awareness, lack of suitable and appropriate products for different market segments, cut throat competition and underpricing among others.
“The insurance sector in Africa still faces numerous challenges, mainly linked to the lack of digitization of the sector in contrast with the rapid evolution of the global economy, the galloping demography on the continent and rapidly changing technological landscape. It is our conviction that this General Assembly will strengthen the insurance sector in Africa, and prepare it to fully play its role in the 21st century,” Mr. Adama Ndiaye, the chairman of FANAF said.
Adding to this, Mr. Gaudance Kanamugire, the chairman of Rwanda Association of Assurers (ASSAR) said: “The digital transformation has had a profound impact on different sectors including the Insurance sector. Today we are faced with a host of problems such terrorism and cybercrimes that are threatening our markets. We need to rethink our business models to deal with the changing environment and offer tailor made solutions to upcoming risks,”.
It is the third time the FANAF general assembly is hosted in Rwanda, having previously hosted the continental insurers event in 2004 and 2012 respectively.
Insurance Sector in Rwanda
Currently, the insurance industry consists of 16 insurers of which 10 are private non-life insurers, four private life insurers, and two public medical insurers. The insurance sub-sector operates a network of 185 branches countrywide, 557 agents, 15 brokers and 13 loss adjusters. Total assets of the insurance sub-sector stood at FRW 366.5 billion as of end June 2017, indicating a year-on-year growth of 10 percent. This growth of assets is mainly attributable to capital injection from some insurance companies and retained profits during the period under review. Between June 2016 and June 2017, new capital injected in the insurance sub-sector amounted to FRW 10.3 billion. Retained profits of the sub-sector amounted to FRW 17.9 billion.