Challenges facing African insurance market - AIB

2020 has been eaten up by the pandemic, COVID-19. In its wake, we are not sure what meaningful activities can still take place this year. Last year though, the African Insurance Barometer (AIB) successfully carried out a survey of the insurance industry in Africa and came out with a report. With COVID-19 making it look like no one is sure what would happen next, we are continuing to look at the findings of that 2019 survey of the insurance business in Africa. Take a reading...

WITH THE INTRODUC TION of higher solvency requirements, the number of insurance players has reduced and according to interviewees, this process is still ongoing. Furthermore, due to the continuously low rates coupled with a number of big claims, some international insurers have decided to recalibrate their African market presence. In fact, as one interviewee puts it, there had been a time when large global international insurers were pursuing the ambition to eventually write business in every African market. That ambition is gone, and the international players today focus on just markets where they see a clear growth perDESPITE

spective. However, while the number of international players might stagnate or even fall, regional African and even domestic players are expanding. Technology is perceived to facilitate this development as mobile distribution

makes data available from consumers in neighbouring markets that previously had been hard or expensive to obtain. Thus, bolt-on market extensions, focusing on an expansion into neighbouring markets,

seem to have become more feasible than in the past.

The trend for foreign insurers entering the African markets and expanding their market share at the expense