Insurers Must Sell Policies That Consumers Need, Suggests Reinsurer Broker
By Liz Booth/Africa Ahead
Insurers must sell policies that consumers need and will want to buy, according to one reinsurance broker.
Speaking at a round table hosted by Africa Specialty Risks (ASR) ahead of the African Insurance Organisation general assembly in Algiers, Jean-Alain Francis, CEO of Mauritius head-quartered Ellegeo Re, said it was time for insurers to stop designing products that suited them and actually delivered what the consumer wanted.
The attendees at the round table agreed that not only should that happen but also that products were kept simple and clear – this was important in the retail space but also in the corporate market where the products can be extremely complex in terms of coverage.
Halim Chalfoun, senior director of the specialty facultative division at Chedid Re, was among those who stressed the need to ensure consumers, whether large corporates or individuals, must fully understand what they are buying and how it would enact in the event of a claim.
“It works both ways,” he said, “not only do people claim and have it fail, but also people do not claim when they are entitled to because they have not understood that a particular clause has enabled a claim.”
Mikir Shah, CEO and co-founder of ASR, is a firm believer that the insurance industry must always innovate if it is to meet the changing needs of policyholders. As a seller of parametric products, he said that ASR is evolving through its use of parametric.
“In Africa,” he said “the insurance industry doesn’t have 150 years of insurance history and we have the ability to leapfrog the West and introduce new concepts. Among the things we are doing are a Mozambique cyclone product which provides cover in an innovative way, as well as an energy product which provides a floor on renewable energy products and so enables investors to have confidence in the projects.”
Amit Khilosia, head Africa at Lloyds, stresses the need for education to ensure such products are understood by insureds and are taken up because they see the value in insurance. “We need massive investment in education,” he said.
This was echoed by Udai Patel, chairman of Afro-Asian Insurance Services, who added that it was important that insurers also worked with regulators to garner their support and understanding of changes.
The group agreed that not every African market is moving at the same pace and that it is much easier to develop products in some countries than in others. Amer Hariri, Gallagher Re’s regional director for Francophone Africa, gave the example of working with the Ministry of Mines in the Democratic Republic of Congo to study the mining sector and the way it is organised. Ultimately, he said, it could lead to a different structure in the country which would include insurance.
As Mr Shah said, it was important for insurers to engage with the government, but it would always be the businesses that feel the impact of change. He added that “technology was the way forward, and using technology in different ways to deliver solutions”.
Technology would also allow better collection and analysis of data. Ian Bishop, an underwriter with ASR, made the point that technology, particularly parametric, not only allows the collection of huge amounts of data now but it is also an enabler of looking forward at the potential for risks crystallising in the future.
