[PHOTOS]: Insurance sector players challenged on innovation

Insurance sector players have been challenged on innovation and creativity in coming up with products relevant and applicable to African markets. Insurance experts and government officials challenged the players during the African Trade Insurance Agency (ATI) 16th annual general meeting in Kigali, yesterday. Experts noted that by introducing products that are tailored to the African market, there is likely to be a rise in the uptake of insurance services across the continent. Prime Minister, Anastase Murekezi gives his openning remarks during the meeting. Prime Minister Anastase Murekezi called on the insurers to tailor-make products for local risks that would eventually drive up insurance penetration. “Now is the right time to develop innovative insurance products tailor made to our local risks. African captains of industry must come on board to significantly increase insurance penetration. It is clear for everybody that higher insurance penetration rates and higher long-term deposit rates will lead to higher investments,” he said. Currently, the level of insurance penetration on the continent remains low, at 1.5 per cent. Murekezi said the low levels were partly a result of the nature of livelihoods of a large percentage of people living on the continent. “Insurance penetration in Africa remains very low mainly because a majority of Africans, who reside in rural areas and are involved in agricultural and informal sector, are without any insurance cover,” he added. Participants follow proceedings during the meeting in Kigali. Other area experts said holds opportunities include trade credit risk insurance, political risk insurance, political violence and terrorist incidents and re-insurance, among others. Israel Kamuzora, the chair of the board of ATI, said innovations ought to be micro-insurance kind of products. “We are being challenged to come up with products that will cater for the masses. These are people engaged in livestock and farming, and small scale businesses,” he said. The Minister for Finance and Economic Planning, Amb. Claver Gatete, noted that the middle income bracket growth across Africa was likely to drive up demand for insurance, hence the need for multiple products. “We are getting more middle income people on the continent. When there are more assets, there is more demand for insurance. At the same time we have a significant number of people who are still micro in nature, having products that are commensurate with that is very important. That is why we are looking at insurance of assets and at the same time, one that addresses perceptions in Africa as well as the political risks,” Gatete said. Prime Minister Anastase Murekezi (L) chats with finance minister Claver Gatete during the meeting in Kigali. The overall impact of this, he said, would be to make sure that people invest cheaply, which can only be done if they are covered. The change of mindset and urbanisation, experts said, would also drive up demand for insurance products. George Otieno, the chief executive of ATI, said the traditional ways of coping with losses, such as community fundraises, were fading away fast giving rise to insurance demand. About ATI ATI was founded in 2001 by African states to cover the trade and investment risks of companies doing business in Africa. It provides political risk, surety bonds, trade credit insurance and political violence and terrorism and sabotage cover. Prime Minister Anastase Murekezi (C) pose in a group photo with guests after his opening remarks in Kigali. (Photos by Timothy Kisambira) As of 2015, ATI had dispensed over $21.5 billion in trade and investments across Africa in sectors such as agribusiness, energy, exports, housing, infrastructure manufacturing, mining and telecommunications. With ATI’s support, banks are able to protect their balance sheet against payment default risks, allowing them to lend more to this vital sector. “In the past year, our business in Rwanda has nearly tripled to $110 million (about Rwf86 billion). But this has mainly been on the investment side. We want companies in Rwanda to take advantage of our trade products as well,” said Otieno. Rwanda is a founding member of ATI, with $8.7 million (about Rwf6.8 billion) in share capital, of which the institution has leveraged nearly 50 times to insure transactions worth $425 million (about Rwf332 billion) in the country over the last seven years. editorial@newtimes.co.rw

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[PHOTOS]: Insurance sector players challenged on innovation