Poor state of insurance regulation , lack of reliable data and statistics, low capital requirements, as well as limited enforcement of regulatory provisions have been identified as major draw backs and key challenges to the growth of African insurance market.
In Nigeria, industry operators, said challenges to the insurance industry include lack of public patronage of the industry pointing out that patronage of the industry by the Nigerian public is yet to reach the desired level .
The operators said this is despite the various legislations enacted to promote patronage.
They also highlighted other challenges facing the industry as inadequate enforcement of compulsory insurances, failure by the government to lead by example in patronage of the industry, inadequate budgetary provisions for the insurances of government asset as well as under utilisation of capacity in the real sector of the economy.
For the sub-regional market, a report tagged: ‘The African Insurance Barometer, which is a survey conducted by the African Insurance Organisation (AIO) on the sub regional market, said that it has been discovered that in some markets, an abundance of under- capitalised companies has led to excessive competition over price rather than for service, a situation, which operators said was capable of eroding consumer trust in the industry.
According to the report, while cooperation within the CIMA (Inter African Conference of Insurance Markets) in West Africa was mentioned as a very positive and successful example of regional collaboration, the report called for a greater cooperation among other African regulators, adding that it will lead to more harmonised regulatory regimes.
The report further pointed at lack of empowerment of regulators, deregulation and a significant gap in the regulation of micro insurance as additional challenges facing the regional market.
“One of the key challenges in Sub- Saharan Africa is the inconsistent and changing regulatory environment our industry is confronted with for multinational clients, intermediaries and insurers the need to arrange cover for large risks and access global insurance programmes even if only for a portion of these risks, the process can be very frustrating as there is no consistent way of achieving this across the region”, the report said.
For Nigerian insurance industry, the Director General, Nigerian Insurers Association (NIA), Mr. Sunday Thomas said the above challenges confronting the Nigerian insurance market if addressed, would unveil the enormous opportunities in the industry.
Thomas, who spoke at a recent insurance forum organised by Access Bank in Lagos, highlighted opportunities existing in the industry as the largely untapped nature of the market.
Growth opportunities presented by the industry due to low insurance penetration in the country, which is an opportunity.
He said attention should be given more to the development of the undeveloped retail market, which is daily calling for more attention while operators are waiting for corporate accounts rebound.
According to him, the renewed investor interest in insurance observing that the industry now seems to have become investors’ delight.
The NIA boss also said another opportunity in the industry is the expectation that with the improved security especially in the North East, business activities would commence and insurance can be reintroduced.