Insurance markets in Africa stabilise but insurers ‘less bullish’, finds AIO survey
Insurance leaders in Africa remain cautious about business growth despite market stabilisation following the economic downturn of 2015/16, a survey of insurance CEOs has found.
The annual Africa Insurance Barometer surveyed the CEOs of the continent’s primary insurers, who said the market’s return to stability was underpinned by growth, resilience and a stronger regulatory framework.
Prisca Soares, secretary general of the African Insurance Organisation (AIO), said: “The mood among Africa’s insurance executives polled for this year’s Africa Insurance Barometer is slightly more cautious than last year.
“Following the deep recession of 2015/16, insurers are less bullish. The crisis exposed Africa’s continued vulnerability to external shocks.
“In addition, the prospects for the global economy and for global trade have reduced for the near-term future.”
However, she noted that the greater availability of technology and increasing awareness and understanding of the benefits of insurance among the middle class will likely be a driver for industry growth.
Survey respondents highlighted the lack of access to skills and talent as a “major stumbling block for the further development of Africa’s insurance industry.
“For the first time all interviewees agree that a lack of access to talent limits the industry’s ability to innovate, escape pricing pressure and commoditisation, expand distribution, improve risk management and rejuvenate management,” the AIO said.
AIO data showed that in 2017, Africa’s insurance premiums increased to $66.7 billion, up by 12 percent from $59.4 billion in 2016. This was due to the main African currencies strengthening against the US Dollar.
Overall insurance premiums increased by just 0.5 percent in 2017, when adjusted for inflation, which was ahead of the growth in advanced markets (-0.6 percent), but below the 10.3 percent volume growth for the world’s emerging markets.
Africa’s largest insurance markets showed positive total real premium growth in Egypt (+9.8 percent), Namibia (+7.8 percent) and Morocco (+3.0 percent), stagnant in South Africa (+0.1 percent) but it was negative in Nigeria (-10.5 percent), Algeria (-2.8 percent) and Kenya (-2.0 percent)
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