- Technology will be a key driver of micro-insurance in Africa as insurers close the protection gap in driving the inclusive insurance agenda.
- IRA Commissioner of Insurance Godfrey Kiptum urged insurers to adopt innovative business models that will curb the damages that hinder access to insurance.
- Insurance companies that fail to adapt will weaken under the pressure exerted by those that use digital technology to slash costs and get better returns on their investments. And they will be left floundering once digital’s relentless force ultimately breaches both the industry’s business model and boundaries.
Technology will be a key driver of micro insurance in Africa as underwriters close the protection gap in driving the inclusive insurance agenda.
Speaking at the ongoing Eastern and Southern Africa Regional Conference on Inclusive Insurance, the IRA Commissioner of Insurance Godfrey Kiptum urged insurers to adopt innovative business models that will curb the damages that hinder access to insurance.
Kiptum said companies that fail to adapt will weaken under the pressure exerted by those that use digital technology to slash costs and get better returns on their investments. And they will be left floundering once digital’s relentless force ultimately breaches both the industry’s business model and boundaries.
“Staying competitive in a digital world will require far more than the addition of a direct sales channel or a few automated processes. What is actually required is a fundamental rethink of the corporation, for which digital technology is but the catalyst. It forces companies to rethink the sources of revenue and efficiency. It forces them to rethink the organizational and talent model. And ultimately it forces them to rethink the business model and the role they will play in an ecosystem that cuts across traditional industry boundaries. The industry has to reinvent,” he added.
The conference in its eighth edition themed ‘Driving Inclusive Insurance Agenda: Closing the Protection Gap’, is being hosted by the Insurance Regulatory Authority of Kenya (IRA) and Munich Re Foundation in Nairobi from April 24-26, 2023.
The conference is a combination of high-quality training and plenary sessions and is supported by the Association of Kenya Insurers, APA insurance, Britam, CIC Insurance, Old Mutual, AB Consultants, FinProbity Solutions, Africa-Re and The Microinsurance Network.
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On his part, CIC LIFE Assurance Managing Director, Meshack Miyogo says the region is ripe for microinsurance driven by partnerships, technology and customer focus approaches.
“The goal must be to meet customers’ expectations, which have been transformed by digital technology. Customers want simplicity—one-click shopping. They have the same expectations whatever the service provider, insurers included. In the shorter term, fulfilling this goal is a chance for insurers to improve profits in their core business. Higher customer satisfaction, driven by the improved service and faster processing times that digitization delivers,” he noted.
Apollo Group Chief Executive Officer Ashok Shah said there is huge potential in inclusive insurance to drive the premium uptake in the region, citing cost as a key factor inhibiting insurance growth.
“The industry needs to develop innovative products that are relevant to the needs of the consumer. Increased insurance penetration can only be realized when the majority of the people take up insurance. , this can’t be realized when the products in the market do not fit the requirements of the common people,” he added.
The IRA 2021 Annual report indicates that Africa reported premiums of USD 74.2 billion accounting for 1.1 percent of the world insurance premiums. This was an increase of 6.2 percent in premium compared to a decline of 1.9 percent in 2020.
Africa’s long-term insurance premium grew by 7.1 percent in real terms to USD 51.32 billion (2020: USD 41.83 billion) whereas, the general insurance premium recorded a growth of 4.4 percent to USD 22.88 billion (2020: USD 20.05 billion) due to economic rebound from pandemic-induced recession in 2020.
