The West African Insurance Companies Association (WAICA) is holding its flagship annual educational conference in The Gambia on the theme: ‘Africa rising: The indigenisation of insurance in West Africa’.
From news report, about 150 insurance practitioners from West Africa are meeting in Banjul to learn ways and means of further growing the industry through indigenisation.
“What we want to have is more participation; more insurance companies owned by West Africans,” the secretary general of WAICA said.
“This does not mean that we are closing our doors to outside investors.”
Reports said strong foreign interest in Africa’s insurance markets began towards the end of the 20th century, when Munich Re, one of the largest reinsurers in the world, established regional offices in West and Central Africa to service its clients.
Since then, some companies from matured economies have entered the market by either following their clients to Africa, or through partnerships, joint ventures, the acquisition of a stake in an existing insurer on the continent, or by acquiring a new business license directly.
Recently, foreign companies have become more aggressive in their strategies for expansion in Africa.Insurance groups in Europe and the United States have increasingly started looking into emerging markets on the continent in a hunt for better growth prospects, because of the maturity of their own markets, where growth is more limited.
For instance, Sanlam Financial Services Group, South Africa’s largest general insurer, in February 2014, acquired a stake in Nigerian Oasis Insurance to penetrate the country’s growing general insurance sector.
In February 2014, London-headquartered insurer, Catlin Group, said it was considering expanding into territories, including Africa.
In December 2013, the United Kingdom’s largest life insurer by market value, Prudential Plc, acquired a majority stake in Accra-based Ghanaian insurer Express Life.
In 2009, Germany’s Allianz Group was approved for a licence by Ghana’s National Insurance Commission to operate in the non-life and life sectors and commenced operations.
In a nutshell, Africa’s relatively untapped insurance market offers a vast opportunity for firms in both mature and emerging-market countries.
In Sub-Saharan Africa, specifically, premiums have been growing by double digits, fueled mainly by the non-life sector.
In Nigeria, premiums are expected to nearly quadruple in the next five years to US$6.3 billion from a little less than US$2 billion in 2012, according to the National Insurance Commission of Nigeria.
In Ghana, the life market is estimated to be growing by 40 per cent annually.Even though up-to-date statistics is difficult to come by in other countries, empirical evidence suggest that the insurance industries in Liberia, Sierra Leone and The Gambia are as well making waves.
Therefore, WAICA is on the right track for initiating the process of indigenising the insurance industry in West Africa for the growth of the industry and the benefit of the sub-regional economies.
If West Africa is to fully tap from the growth potentials of the insurance industry for real economic development and rapid poverty reduction, the indigenes should have a greater hand without necessarily closing out to foreign investment.
The governor of the Central Bank of The Gambia has stated the truth of what obtains globally: “No country has ever marched out of poverty without a strong indigenous private sector.”
WAICA president also said it all:”It is time for West Africa to build stronger insurance institutions from within.”