Africa: Insurers to Partner with GSM Operators to Deepen Penetration
African insurance operators have resolved to partner with distribution enablers like mobile phone operators as part of efforts to increase the level of insurance penetration in the continent.
This formed part of the resolution adopted at the 38th annual conference of African Insurance Organisation (AIO) recently concluded in Victoria Falls, Zimbabwe. The theme of the conference was "In pursuit of the uninsured African."
"We realise that distribution, premium collection and administration of micro-insurance products will require cost effectiveness and administration efficiencies. To this end, we shall partner with distribution enablers like mobile phone operators to secure high market penetration," the resolution reads in part.
The participants at the conference also agreed to collaborate with various distribution channels which include church organisations, schools, associations and the rural governance system.
The conference noted that the sustained growth and development of the African insurance industry and meaningful contribution to the Gross Domestic Product (GDP) will be greatly enhanced by grasping the tremendous opportunities presented by micro-insurance solutions.
It was stressed that "a well managed micro-insurance regime would be not only a long term revenue and profit stream for the industry, but also a mechanism for wealth creation for the currently uninsured and under-banked African market.
Members of the association were therefore encouraged to develop Information Technology capability to enable them to link into those of service providers who partner them in the delivery of the micro-insurance products.
In recognition of the fact that perils like drought, crop failure, health, funeral, livestock mortality and pests are some of the nemesis of the target non urban mass market, the insurance operators plan to diligently develop suitably simplified and affordable products and service solutions that meaningfully secure the basic risk transfer needs in respect of such risks.
Embedding and resuscitating the trust and confidence of the target market in insurance were also considered paramount. As such, the operators intends to rebuild trust and consumer confidence by distributing simplified, easy to understand products while settling all genuine claims arising there from rather than avoiding them on technicality.
To provide viable micro-insurance solutions, the participants at the conference also resolve to encourage private-public sector partnership with key stakeholders like government and regulators in an effort to secure subsidies and an enabling regulatory framework for the initiative.