Africa’s insurance sector decries low penetration rate

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Africa’s insurance sector on Monday decried the low penetration rate for its services in the continent.

Tope Smart, President of the Africa Insurance Organization (AIO) told a continental forum in Nairobi, the capital of Kenya that the average insurance penetration rate in Africa stands at two percent compared to the global average of around seven percent of the population.

“This is a concern to all of us as insurance practitioners,” Smart said during the 48th Africa Insurance Organization conference.

He revealed that the industry’s growth keeps getting slowed down by the inability to build substantial capacity required to power expansion of the services sector.

“There is still heavy reliance on foreign expertise while the insurance industry is plagued by issues of trust,” Smart said.

Ben Kajwang, Vice-President of AIO noted that Africa’s industry performance is also hurt by the low income levels among the consumers.

Kajwang added that low access to insurance products in Africa has also resulted in poor performance of the sector.

According to the pan African organization AIO, the bulk of Africa’s gross premiums are concentrated in ten African States with the rest of the countries recording below Africa’s average insurance revenues.

Eric Simiyu Wafukho, Chief Administrative Secretary in Kenya’s National Treasury said that the local industry is addressing the low insurance penetration rate through the development of micro insurance products that target the excluded segments of the population.

“The micro insurance frameworks have developed insurance covers that are cheap and meet the requirements of low income persons,” Wafukho added. Enditem

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