Africa offers "huge opportunities" for insurers, according to AM Best
The sub-Saharan African countries offer "huge opportunities" for insurers and reinsurers, according to AM Best Company.The sub-Saharan African countries offer "huge opportunities" for insurers and reinsurers, according to AM Best Company.
In its new report, the rating agency specialized in insurance highlights Kenya, Nigeria and Ghana as particularly interesting.
Entitled "Africa's Insurance Markets: Gearing Up for Sustained Growth", the report finds that the attraction of the African insurance market comes from countries with large growing populations and developing economies, where the general market is relatively untapped among consumers.
Indeed, despite a high average GDP growth on the continent, many insurance markets in Africa are small by international standards. The insurance penetration, although increasing, remains low at less than one percent globally.
The report also cites regulatory reforms undertaken in recent years by several African countries that helped facilitate access to African markets. Between June 2011 and June 2012, 28 countries in sub-Saharan Africa have implemented at least one regulatory reform to facilitate business in the insurance sector.
AM Best expects that the growth of insurance will be in line with economic growth, but this will be dependent on a greater accessibility to various distribution channels (including mobile banking) and product offerings , as well as their alignment with local cultural requirements. The report cites microinsurance or Takaful or Shariah-compliant products in countries such as Sudan, Egypt and Senegal.