African Insurance Regulators Counting on Technology to Grow

5
African Insurance Regulators Counting on Technology to Grow
African Insurance Regulators Counting on Technology to Grow

Africa-Press – Eswatini. Insurance regulators from different countries across Africa are optimistic that maximizing and adapting technological innovations such as Artificial intelligence (AI) will grow insurance penetration.

The Chief Executive Officer of the Insurance Regulatory Authority (IRA) Uganda, Alhaj Ibrahim Kaddunabi Lubega, revealed that resilience is no longer a choice but rather a necessity in today’s changing world.

“Several challenges such as economic fluctuations, climatic changes and technological disruptions are continuously shaping the global landscape. Therefore the ability to withstand, adapt and thrive amid these challenges has become the cornerstone of sustainable development,” Kaddunabbi said.

Speaking at the Africa Innovation for Resilience (AIR) Conference held in Kampala on July 4 under the theme, “Harnessing Innovation for Resilience’ that was attended by representatives from numerous African countries and 13 regulatory bodies across the continen, Kaddunabi noted that the sector should prepare for the transition to technological innovations such as AI.

“Digital transformation has proven crucial for sustaining operations and fostering resilience. Innovation is at the heart of this resilience and it is a powerful catalyst that can transform threats into opportunities and drive sustainable progress,” he explained.

He believes that the growing use of technology, especially AI as predicted, is likely to drive sales and manage 85 percent of customer interactions in the financial services sector by at least 2030.

Currently, statistics indicate that there are over 1.4 billion people across the African continent that need the insurance services.

“On the African continent we have fewer numbers of people who have a form of insurance. So what is being done and the efforts we are doping on making sure that we have micro insurance and the other insurance products which talk to the needs of people is to ensure that we enhance those numbers,” Kaddunabi said adding that Africa’s 1.4 billion people need to have more insurance products, life products and other products which will safe guard even the properties they have.

Recent statistics from the Insurance Regulatory Authority indicate that Uganda’s insurance penetration stood at 0.88% in 2022 compared to other Africa countries like Kenya at 3%, and South Africa’ at 14%.

Mr Elias Omondi, the Principal, Innovation for Resilience, FSD Africa noted that benchmarking from such countries especially with Uganda’s target to grow the economy 10 fold before 2040 is paramount.

“We have brought all these countries together because there are so many efforts that can be learned from different countries. For instance if you look at South Africa, the penetration is around 14%, Uganda’s at about 1-2 %. This means that we can look at what South Africa has done to better solve these particular challenges,” he said.

Ms Kate Airey, the British High Commissioner to Uganda underscored the role of technology in driving insurance penetration on the African continent.

She said combining insurance with technology offers a huge opportunity for growth for the sector and driving penetration levels which are still low in Africa.

“Countries covered with insurance have a higher percentage of GDP. Insurance can also support investments,” she said. Citing an example of the UK that has the largest percentage of insurance in the world.

Mr Amos Lugolobi, State Minister for Finance and Planning at the Finance Ministry, urged insurers to utilise emerging technologies because for a long time, the insurance product has been grappling with trust issues for a standing at 0.88 per cent.

This he says calls for the need to have an increase in digital technology usage within the insurance sector to be able to provide access to both the served and unnerved customers.

“Digital technologies are rapidly changing the insurance landscape in Sub Saharan Africa and have the potential to enhance financial inclusion by providing access to unserved and under served customers. Digitisation can also bring down administrative costs, introduce new business models adaptable to the needs of customers and enhance customer value,” Lugolobi said.

Despite the increasing low insurance market penetration, researchers have constantly revealed that full implementation of the national health insurance scheme has potential to offset the current less than 1%.

For More News And Analysis About Eswatini Follow Africa-Press

LEAVE A REPLY

Please enter your comment!
Please enter your name here