From Uche Usim, Abuja
President, African Insurance Organisation (AIO) and the Group Managing Director/CEO, NEM Insurance Plc, Mr. Tope Smart, has blamedlow income, low awareness level and failure to embrace digital technology, among others as the reasons Africa is experiencing low insurance penetration.
Speaking at the recently-held Insurance Retreat for Africa organised by the Government of Zanzibar, Smart listed a plethora of reasons like; low income, low awareness level, failure to embrace digital technology, high level of financial exclusion, lack of infrastructural and distribution channels; lack of domestic skills, shortage of data, and brain drain as fundamental factors that made the African average insurance penetration rate drop from 2.78 per cent in 2019 to 2 per cent in 2020.
According to him: “In 2019, while the global average penetration rate was 7.20 per cent, that of Africa was 2.78 per cent. In year 2020, while the global average went up to 7.40 per cent, that of Africa came down significantly to about 2 per cent. This should be of great concern to us as a region.”
He also expressed worry that regulators were lagging behind in terms of innovation, adding that timing and implementation of regulatory changes needed to be urgently looked into.
The AIO boss maintained that lack of consumer trust occasioned by weak companies and other issues like pricing, market related issues, cultural concerns, fragmentation and over competition must be dismantled as they remain retardants to insurance penetration on the continent.
He, thus, charged relevant stakeholders to address these challenges to bring Africa at par with other regions across the globe.