Rwanda hosts General Assembly of the Federation of African National Insurance Companies

President Kagame addressing the FANAF general assembly.

The 42nd Annual General Assembly of the Federation of African National Insurance Companies (FANAF) kicked off in Kigali on Monday with a 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 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,” Kagame said.

He also observed that services, according to the World Bank, are the fastest-growing segment of the global economy, already accounting for 70% of output, and 60% of employment.

“Insurance services are an important part of that picture. But insurance does much more than compensate for misfortune. The more advanced an economy, the greater the size, diversity, and efficiency of its insurance market. Indeed, it is fair to say that insurance underpins prosperity and innovation. Insurance products allow investors and entrepreneurs to take risks. In the United States around one-third of corporate debt is financed by insurers. Insurance also facilitates the growth of trust over long distances. Without it, cross-border trade would grind to a halt,” Kagame said.

The President also pointed out that insurance is critical for the structural transformation of African economies.

“By giving a price to various forms of risk, insurance helps us to detect hidden danger and plan accordingly. This means fewer deaths in fires and floods, safer roads and buildings, and less crime,” he said.

Currently, the insurance industry in Africa represents only about 1.5% of insured catastrophe losses worldwide, although the continent is home to 16% of the global population. In 2015, the value of insurance premiums in Africa amounted to about $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.

Among the key challenges faced by the insurance sector in Africa are 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,” said Adama Ndiaye, the chairman of FANAF. “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.”

Gaudance Kanamugire, the chairman of the Rwanda Association of Assurers (ASSAR) which co-hosts the meeting, said that the digital transformation has had a profound impact on different sectors including insurance.

“Today we are faced with a host of problems such as 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,” he observed.

It is the third time the FANAF general assembly is hosted in Rwanda, after 2004 and 2012.

The 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. 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.

  • By Hope Magazine
  • Posted 13th February 2018

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