Insurance operators and regulators at the just-concluded General Assembly of the 44th African Insurance Organisation Conference, have passed a resolution to work on six common goals to advance the US$64 billion market.
In the resolution, the stakeholders agreed to invest in partnerships that are wider, including non-insurance actors, and deepen within the industry areas that are critical to the agenda of increasing insurance penetration and realisation of financial inclusion.
The resolution was read by Chief Executive Officer, Uganda Insurers Association, Ms Miriam Miriam Magala. Other resolutions at the conference include adoption of a range of technologies to collect data, design and deliver insurance products, provide educational information to the public, and manage the threats of cybercrimes.
They also agreed to invest in capacity building across the entire industry including insurance companies, regulators, associations, and institutes; pursue the financial inclusion agenda through development of insurance value chains that cut across several stakeholders/actors within and outside the traditional insurance sector.
Others are adoption of appropriate laws and regulation that allow for innovation and minimal compliance costs; and pursuit of a diversified strategy for consumer education that embraces the various strands of building capabilities of consumers to make the right decisions with full knowledge of the benefits and obligations and access.
They also unanimously agreed that to reach the bottom of the income pyramid, products have to be delivered effectively and at an affordable price, which calls for leveraging capacities that exist within and outside the industry.
They observed that as is the case with the industry, which enters into upward partnerships through re-insurance to deal with big risks, insurance actors have to do downward partnerships to better manage diversified small risks at the bottom of the income pyramid.
The conference noted that increasing penetration of the smallholder farmers requires a lot of data to design and evaluate products, as well as make decisions regarding responses to emerging risk positing that technology will help to provide products and information as well as enable premium collections and claims payments.
A specialised pool of knowledge for research, product development and regulatory reviews is required in a centralised place that serves the entire industry, such as , training institutes/associations.
“We have resolved to work with government, regulators, insurance and re-insurance companies, local/regional/global associations and development agencies, such as the World Bank. He urged the Insurance Initiative, International Association of Insurance Supervisors (IAIS) to invest in developing the required capacities.
In the case of agricultural insurance, the actors include farmers, agro-dealers, financial institutions, agents and insurers, among others. All the stakeholders must be duly prepared for their roles as they are part of the chain in a world where “insurance is not bought but sold’’.
“Regulation should be responsive to the African context, albeit within a framework that allows for appropriate harmonisation-based on best international practices, industry involvement and regional fora.
‘’Regulations should reflect local needs and conditions, while the strands should essentially address business and financial management, among others, to reduce business risks.”
Source: The Nation
