African re/insurance companies have been advised to take capital reforms crucial to increase consumer confidence and public awareness and also, create and sustain the capability to be in position for the benefits of African Continental Free Trade Area (AfCFTA).
In different nations across Africa the trend is towards higher capital requirements for re/insurance companies to ensure their solvency is at the threshold required which would establish stronger companies, as well as promote job creation and build capacity in the industry.
These standings formed part of the summary of key findings published in Africa Insurance Pulse (AIP) of African Insurance Organisation. Besides, the report noted structural reforms would be the forerunner to African insurance market penetration in respective nation market and regional economic communities REC.
The report noted that the stare of undeveloped market in most of Africa is pronounced and alludes that the maturity of insurance market is low in most African countries. However, AIP says all vents to feed the various markets is not closed, “Insurance penetration is expected to increase in those African markets where insurance growth has been accompanied by structural reforms, such as market liberalisation, compulsory insurance enforcement, wider distribution, public-private partnerships and a regulatory system that promotes innovation and access.”
The African Continental Free Trade Area (AfCFTA) AIP captures, will create a single market covering more than 1.2 billion people, with a current gross domestic product of more than US$2.5tr and Africa’s insurance market should be at the vantage position to deliver risk solutions. . The free flow of goods, services, people and capital under AFVFTA AIP key findings stated, is expected to boost intra-African trade, promote industrialisation and strengthen the capacity of African companies to supply world markets.