With current penetration growth in Africa below 3% and Nigeria’s penetration at barely 1%, risks experts believe this is the bloodline for growth that will also capture the grossly uninsured natural catastrophe risks.
Africa’s risk protection gap was taken head-on by senior risks manager – risk regulations at FSD Africa, Elias Omondi, at the launch of Risk, Resilience, and Regulation Lab(R3Lab) in Lagos today.
Omondi stated at the Wednesday event that a significant portion of the population in Africa is underinsured, leaving them exposed to risks and unable to manage and recover from them.
However, the continent in the midst of this poor insurance score, has a valued gross written premium of $68bn, and, 91% of these premiums in just ten countries.
He said South Africa stands out as the largest and most established insurance market, accounts for 70% of the total premiums. Besides, Africa premiums per capita are 11-fold lower than the world average. According to Omondi, this is where the growth charge begins.
He said the current insurance penetration in Africa which is below 3% made the coast clear for FSD Africa to step in as a development partner. He comments, “Our role in Africa is to be a shock absorber for our clients, so we can build the societal resilience needed to close the protection gap. The Swiss Re Institute estimates that, globally, about 66% of all-natural catastrophe economic losses over the past 10 years were not insured, in Africa this protection gap is even higher.”
He cites an event to buttress, “You may recall Cyclone Idai led to an overall economic loss of USD 2bn across Mozambique, Malawi and Zimbabwe, of which only 7% was insured, a staggering 93% protection gap.”
Rather than walk away from the unattractive stats, Omondi said it is this protection gap that fuels the mission to Africa. His close up shot, “Our primary objective in Africa is to address this immense protection gap to make Africa more resilient.”