Digitalisation and the role of Africa in business were the theme of two key polling questions during the just ended IUMI 2018 in Cape Town.
- What are your expectations for IUMI Cape Town and
- What will impact our business most in the next ten years?
A majority of those who responded to the polls indicated that “Africa will play a much stronger role in our business – IUMI should be part of it”. How so and how can you position yourself to leverage this shift?
The reasons why Africa will play a significant role in many businesses are almost obvious. Trade with Africa is increasing but also, trade within Africa. As such, we expect to see some growth in premiums across the continent as the continent as the African Continental Free Trade Area agreement comes into force. Also, international trade volumes are on the rise. With China making bold moves in various countries in Africa, various other economic super powers are looking to counter its influence by also increasing their business and aid with Africa.
Digitalisation is now a buzzword in the insurance scene across Europe and the world. Africa is not left out. With many of the attendees expecting digitalisation to impact their business in the near future, brokers and underwriters across the continent are also gearing up for this shift. In markets like South Africa, Nigeria and Kenya, big insurance companies are partnering with agile insurtech startups to develop products that will make underwriting easier and faster.
In some cases, these insurtechs are designing new ways of reaching customers. A company like OPTIMIZ is working on an innovative product that would significantly reduce the time it takes for cargo underwriters and shipping lines to negotiate the resolution of a subrogation recovery.
Riding the wave of Africa’s increasing role in insurance will take..
courage and vision. Africa’s changing youth demographics is certainly a benefit. If managed properly. This presents significant opportunities for insurance products. One of the reasons why the insurance penetration levels in Africa is low is because those with spending power are still the older generation which still relies on luck rather than actuarial science in forecasting risk. However, the middle class is swelling right across Africa.
Insurance companies which will win the race of creating new users on the continent will need new, fun ways of reaching their target market. For example, mobile money is on the rise in Africa. Enabling small business owners and fashion houses to buy and sell goods online. Insurance companies need to capture these young entrepreneurs at the point of sale i.e online. For marine insurance though, this may not work, just yet, given the complexity of the product. Perhaps it is time to simplify it?