Africa-Press – Angola. Insurance companies in the Angolan market need to identify the best mechanisms to develop and disseminate agricultural insurance throughout the country, with a view to increasing production and strengthening food security, said this Tuesday, in Luanda, the Minister of Finance, Vera de Daves de Sousa.
Speaking at the ceremony presenting the results of the study on the national insurance market, carried out by the international consultancy Enrst Young (EY), in partnership with the Angolan Agency for Insurance Regulation and Supervision (ARSEG), Vera Daves reaffirmed that agriculture is the sector of economic activity that plays a fundamental role in the process of any economy.
For this reason, the minister understands that agricultural insurance can contribute, on a large scale, to the security of agricultural investments, whether for farmers or financing institutions.
According to the minister, increasing national production and economic diversification are among the main objectives of the Angolan Executive, which focuses on safeguarding national food security.
For this purpose, emphasizes the leader, the Government signed, in July 2023, a technical assistance agreement with the International Financial Corporation (IFC) to support ARSEG and insurance operators in the implementation of Agricultural Insurance in Angola.
According to the government official, this process must be based on climate indices that are suitable for agricultural producers and thus protect national production.
On the other hand, in the form of an assessment of this activity in recent years, the head of Finance said that the contribution of this sector to the Gross Domestic Product (GDP) has a penetration rate of less than 1%.
This fact results, among others, the director pointed out, from the suspension environment, due to some slowness in paying the insured’s premium (in some operators), which inhibits the sale and expansion of insurance services.
To mitigate these effects, the head of Finance understands that it is necessary to continue the process of assimilation and implementation of good corporate governance practices, with the aim of promoting greater solidity, professionalism, reputation and reliability of companies operating in the country.
When addressing ARSEG, the minister recommended further efforts to improve the regulatory environment, which is balanced and capable of promoting competitiveness and defending the interests of policyholders’ rights.
“There is an urgent need for ARSEG to remain increasingly firm in its supervision of supervised entities, with a view to inhibiting harmful conduct that is outside the laws that regulate insurance activity in the country.
However, despite the challenges arising from Covid-19, the Minister of Finance considered the insurance sector resilient, as it managed to maintain an increasing trajectory, with gross premiums written growing at an annual average of 20 percent (%), overall 72%, the accident rate set on a decreasing trajectory, as in 2019 it was 42% and in 2022 it rose to 32%.
Contributions to the pension fund grew by 144%, with the real value growing twice as much, from 409 to 835 billion kwanzas.
To this end, the governor explains, the Executive carried out structuring legislative reforms in the sector, which effectively helped to create a new dynamic in the exercise of insurance activities, with emphasis on the approval of the Insurance and Reinsurance Activity Law, the approval of the Special Regime of Tax exemption for the Life Branch and the Pension Fund.
In this sense, Vera Daves de Sousa also highlighted the approval of the diploma to create the Regulator’s New Revenue Collection Model.
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