The New Advisor
No Result
View All Result
Wednesday, March 3, 2021
  • Login
  • Register
  • Home
  • Investment
  • Insurance
  • Retirement
  • Wealth Managemet
  • Resources
  • Your Profession
Subscribe
The New Advisor
  • Home
  • Investment
  • Insurance
  • Retirement
  • Wealth Managemet
  • Resources
  • Your Profession
No Result
View All Result
The New Advisor
No Result
View All Result

Africa’s changing and growing insurance customers

by Staff Editor
August 15, 2019
in Insurance
0
Africa’s changing and growing insurance customers

For forward-thinking insurers, Africa is up for grabs.  Escalating urbanisation, coupled with a rising middle class and a growing younger population makes for an increased need for protection for both life and assets.

ADVERTISEMENT

While the effects of the global financial crisis are still being felt, the African Development Bank predicts a growth in Africa’s GDP to 4.0 percent in 2019 and 4.1 percent in 2020, creating significant opportunities for insurers to enter this largely untapped market.

According to Herman Lombard, Founder and Executive Director of African Unity, Africa’s insurance industry accounts for just 1.2% of insurance premiums written globally, with South Africa accounting for about 75% of that.

“The potential for doing business in Africa is enormous, and companies are coming up with innovative and efficient ways to meet the expectations of this market”, he said.

According to reports, only 8% of low-income earners have full life insurance and most are not able to afford the premiums for their most dominant risk – loss of job or income.

Coupled with the fact that the informal economy in South Africa has a spend of R280 billion, rivalling the formal economy’s R300 billion, Lombard believes that there are huge incentives for insurers to move away from traditional models to products that are accessible and affordable to the under- and uninsured.

Understanding the regulatory regime of a region is critical to compliance and growth.  In South Africa, new prudential and market conduct regulations, as well as the introduction of the IFRS 17 Accounting Standard, have put financial and regulatory pressure on insurers.

However, as Lombard points out: “These new regulations are progressive and allow for new entrants and innovation into the market”.

He adds that the new framework will foster financial inclusion and promote competition in the market.

A PWC report on the African insurance industry estimates that the population on the continent will grow by 114.4% by 2050 to about two billion people. Furthermore, because the population of Africa is the youngest in the world with an average age of just 19.7 years in 2010, there will be a large working-age population.

“For insurers, this is good news because a younger population is linked to GDP growth which in turn makes for a wealthier population and an increase in insurable lives and assets”, says Lombard.

Lombard stresses that a younger population also means a more tech-savvy population who are connected 24/7 and have expectations of customised solutions and an entirely virtual, paperless relationship with their insurer.

“This will force many insurers into a paradigm shift away from their legacy infrastructure and systems to adopting technology to suit the needs of the customer and to offer competitive pricing”.

Innovative insurers who have taken on board emerging technologies are now able to quickly analyse customer data, enabling them to understand their customer’s needs and rapidly develop new products.

In Africa, partnerships with insurtech companies are becoming increasingly popular, enabling greater innovation and a faster response to customer expectations.

“Ultimately, all insurers should be optimizing their digital capacity to meet customer expectations and add value and efficiencies to the business”, says Lombard.

Attracting and retaining talent remains a key risk for insurers in the region and the industry will have to upscale its investment into training, especially in the technology and actuarial fields if it is to entice young talent.

Lombard believes that many organisations will have to rethink their traditional, rigid approach to working hours and focus on outputs and deliverables if they are to draw millennials into the business.

“Although there are many regulatory and environmental challenges in the region, globalisation and the emergence of the global citizen makes for a conducive environment in which to innovate new customer-centric products”, he concludes.

Previous Post

How to check that your retirement savings are invested in good causes rather than bad

Next Post

Economic trends will dominate the ‘roaring twenties’

Next Post
Economic trends will dominate the ‘roaring twenties’

Economic trends will dominate the ‘roaring twenties’

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

ADVERTISEMENT
  • Trending
  • Comments
  • Latest
Solving The Retirement Savings Challenge: Lessons From Around The World

Solving The Retirement Savings Challenge: Lessons From Around The World

August 15, 2019
Boris, Brexit and the Bailout Blues

Boris, Brexit and the Bailout Blues

August 15, 2019

How to protect your finances should a retrenchment rock your finances

August 15, 2019
Unemployment highest in history of the QLFS data

Unemployment highest in history of the QLFS data

August 15, 2019
Record exit activity reported by VC fund managers in SA

Record exit activity reported by VC fund managers in SA

0
Economic trends will dominate the ‘roaring twenties’

How to check that your retirement savings are invested in good causes rather than bad

0
Africa’s changing and growing insurance customers

Africa’s changing and growing insurance customers

0
Economic trends will dominate the ‘roaring twenties’

Economic trends will dominate the ‘roaring twenties’

0
Record exit activity reported by VC fund managers in SA

Record exit activity reported by VC fund managers in SA

September 18, 2020

Big data gives local medical scheme an edge in assessing pandemic impact

September 18, 2020

The burning platform for long-term insurance

September 4, 2020

The latest bout of load-shedding could be devastating for South Africans, especially if not insured

September 4, 2020

Recent News

Record exit activity reported by VC fund managers in SA

Record exit activity reported by VC fund managers in SA

September 18, 2020

Big data gives local medical scheme an edge in assessing pandemic impact

September 18, 2020

Categories

  • Insurance
  • Investment
  • Resources
  • Retirement
  • Wealth Managemet
  • Your Profession

Site Navigation

  • Home
  • Advertisement
  • Contact Us
  • Privacy & Policy
  • Other Links

The New Advisor brings you a platform to voice your views and where financial advisors can learn about industry standards, get news, information, debate and develop new ideas.

© 2019 Published by Cane Media (Pty) Ltd. https://thenewadvisor.co.za

No Result
View All Result
  • Home
  • Advertisement
  • Contact Us
  • Subscribe

© 2019 Published by Cane Media (Pty) Ltd. https://thenewadvisor.co.za

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In