By Favour Nnabugwu

African Insurance operators in 54 countries across the globe are today strategizing on the best approach to dealing with the problem of uninsured in the continent including Nigeria.

With over 600 practitioners already seated for the 38th African Insurance Organisation (AIO) Conference at Elephants Hills, Victoria Falls, Zimbabwe from Monday to Thursday this week, insurers on the continent wish to unravel the mystery behind the uninsured.

Insurance policy in most African countries is confusing to many. Much of the reason stems from the fact that majority of Africans live on less than a dollar per day excluding South Africa and Egypt.

Mr. Justus Uranta, Managing Director/Chief Executive Officer, Niger Insurance PLC and Mr. Tony Ojeme, AGM/Head, Corporate Affairs, during an interaction with members of the press in Lagos

Mr. Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM) said that insurance awareness and penetration was tied to economic successes. He added that South Africa alone accounted for about 70 per cent of the total African insurance market.

He, however, said that there is still a long way to go for the continent. At present, less than 10 per cent of the insurable population was actually insured, adding that a significant number of vehicles in Africa were not properly insured.

Potentially, Nigeria has the biggest insurance market in Africa but weaknesses in the industry made it that most of the large insurance businesses were

underwritten by foreign companies. Daniel, however, noted that the domestic industry is poised not only to penetrate deeper into the domestic market but expand to other regions of the continent.

Mr. Solomon Tembo, Chairman, AIO Organising Committee said that the committee has for long been ready for the 38th AIO General Assembly and Conference. The event, he said is not only important to the insurance industry in Africa but also to the Zimbabwean economy as a whole.

Tembo who is also the vice-president of AIO said Zimbabwean insurance industry was excited at the prospect of hosting the conference as it would generate business for the country and especially the tourism industry in Victoria Falls. Zimbabwe, he explained, is for the third time hosting the AIO after the country successfully hosted the AIO in 1988 and 1994.

Mr. Femi Okunniyi, Managing Director of Goldlink Insurance Plc submitted that the insurance industry in Africa must be able to develop micro- insurance products and services that would at best cater for the needs of the sector’s clients. He said there is a distinctive difference between marketing insurance and selling insurance. Okunniyi cautioned that establishing a business for the sole aim of profit maximization would make operators miss the track in the business. A company must first of all render good services and also satisfy the needs of its customers after which it will make profit.

He advised that a positive and flexible regulatory environment is necessary for the development of micro-insurance. He said it would be reasonable to state that the basic legal framework exists that should allow for micro-insurance to thrive in the country. The insurance expert implored insurance operators to key into the numerous potentials that micro-insurance has to offer the sector and make good use of it.

Although the problem of uninsured and underinsured within African countries is pertinent and far reaching, Africans have a general lack of awareness and an inaccurate understanding of this situation. He noted that the number of uninsured Africans is not large compared to African-Americans.

Demand for insurance services keeps changing during the various stages of life starting with employment or starting a business, marriage, childbirth, education, personal insurance needs such as medical, mortgages, annuities in old age and many more.

Mr. Lovemore Madawo, Chairman, AIO Technical Committee said the conference comes at a time when insurers are working towards instilling confidence in business as well as ordinary individuals in the insurance sector. “We are aware that as a country, we have gone through hyperinflation where people lost confidence in the sector. But despite that, we are hopeful of a positive change due to economic stability brought by the multi-currency system.”

The insurance market is a growth industry on the African continent. Although it is still quite marginal when compared to the western market, as multinationals, small business owners and governments do not hesitate to sign contracts with insurers.

But if insurance is advancing in terms of companies and professionals in Africa, the rest of the population remains largely under-insured. To attract a larger share of the population, insurers diversified their products and now offer health or death coverage.

Mr. Olushola Ladipo-Ajayi, Chairman, Nigerian Insurers Association (NIA) said the insurance industry is planning to fully go into microinsurance in order to assist the low income earners mitigate risk. Ladipo-Ajayi stated that the sector was focusing on compulsory insurance for now as a means of gaining insurance penetration in the country after which it will go into other personal insurances.

He advised that the operators in the industry must place themselves in a vantage position to offer the best service in the business. He said that such policies were in operation in the sector some years back, though, not buoyant enough as a result of lack of insurance culture by the insuring public, poverty, among others, he said.

The Lasaco Assurance chief stated that the platform on which microinsurance business would thrive would be determined by the ability of insurance companies to responsibly settle genuine and reported claims promptly. For many insurers, it is necessary to increase insurance obligations for public policy imperatives: the need to protect third party liability, mandatory funded pension and other compulsory insurances.

Muslims, on the other hand, do not subscribe to certain etiquettes of the conventional way of conducting insurance business but the entry and development of Takaful insurance has come to address this anomaly. The adoption of Muslim-friendly insurance stands to expand the region’s Gross Domestic Product. In Ghana for instance, over 90 per cent of the over 22 million Ghanaians do not have any form of insurance.

Mr. Kwame-Gazo Agbenyadzie, Managing Director of the Metropolitan Insurance Company attributed the situation to misconceptions about the insurance industry.