Setting Agenda For New President of African Insurance Organisation
Mr. Tope Smart, incoming President of AIO
All is set for the 47th Conference and General Assembly of the African Insurance Organisation (AIO), and one of the major highlights of the conference will be the inauguration of the new president of the Organisation who will pilot the affairs of the body for the next one year. Insurance players and stakeholders in Nigeria and in some other African countries have spoken on their expectations from the incoming President of the AIO; EDET UDOH who sampled their views reports
The African Insurance Organisation (AIO), established in 1972, is a non-governmental organisation recognised by many African governments. It consists of a General Secretariat, headed by a Secretary-General, an Executive Committee, headed by the President and the General Assembly which is the supreme body of the Organisation.
In a few days from today, the immediate past Chairman of the Nigerian Insurers Association (NIA) and the Group Managing Director of Nem Insurance Plc Mr. Tope Smart will take over the baton of leadership as the President of the African Insurance Organisation (AIO).
He will be taking over from Chief Operations Officer (COO) of Allianz Africa, Delphine Traoré, during the forthcoming 47th Conference and General Assembly of the AIO billed for September 4-8, 2021 in Lagos, Nigeria. Mrs. Dalphine Traore was appointed President of the African Insurance Organisation (AIO) at the closing ceremony of the 46th AIO annual general meeting held in Johannesburg from June 9 to 13, 2019.
As President of AIO Mr Smart is expected to take the leadership responsibllity of the Pan-African Organisation and with this a lot will be expected from him especially driving the implementation of the new strategic plans of the organization which include advocacy, research, training, events, reputation building and capacity building.
Apart from the above mentioned six AIO strategic plans which will form part of the agenda of the new AIO President, our findings from some insurance stakeholders across Africa show that a lot is expected from the incoming President of the AIO, some of which are stated below.
Players and stakeholders of insurance industries across African Continent expect the new AIO President to stimulate the growth of African insurance markets through structural reforms namely: Market liberalization and deregulation, digitization, the enforcement of compulsory insurance, increased access through wider distribution, public-private partnerships, and regulation to support innovation and access which have all been shown to build consumer trust and develop more resilient insurance industries with better-protected populations in comparable markets.
He is expected to ensure a more intense follow up of the implementation of the Africa Continental Free Trade Area, especially the insurance sector contribution, a keen follow up of the AIO’s strategic plan, addressing the crucial issue of premium flight and getting regulators more proactive in insurance development issues.
For cohesion and effectiveness, Smart will be saddled with the task of ensuring that the various blocs that exist in the African insurance markets such as the Francophone (French Speaking Countries) and Anglophone (English Speaking countries) are made to work together.
He is expected to come up with initiatives that will enable indigenous African insurance companies to compete effectively with their counterparts globally.
In order to drive growth in the continental market, the new AIO President is expected to work hard to ensure increased access to insurance through digitalization and innovation; accelerate growth through competition, innovation and disruption; push for strong partnerships with Fintech and Mobile Money; use regulatory supervision to get to consolidation; ensure long-term growth prospects through Pan-Africanisation and develop agriculture insurance and climate risk insurance.
The spokesperson of the National Insurance Commission, Mr. Rasaaq Salami speaking on the industry’s expectation from the new AIO president said, “Our expectations from the new AIO President is for him to take the AIO beyond the present level, take it to the right level; ensure regional integration and cohesion. We expect that he will be able to come up with initiatives that will enable indigenous African insurance companies to compete effectively with their counterparts globally.
“The AIO has come a long way. We believe that Tope Smart with his wealth of experience having occupied several leadership positions in the past, being the past Chairman of the Nigerian Insurers Association (NIA), has the wherewithal to pilot the affairs of the AIO and take it to the next level. We believe very strongly that he will bring his wealth of experience to bear in this job.”
The Executive Secretary and Chief Executive Officer of the Nigerian Council of Insurance Brokers (NCRIB), Mr. Tope Adaramola, while enumerating what the new AIO President should do during his tenure to ensure the growth of insurance industry in Africa, said “What the industry should be expecting from him is to be their ambassador, as a Nigerian because it is an international appointment and secondly to be able to be the face of the insurance industry in Nigeria in particular and Africa in general.
“As you know, the insurance industry in Nigeria is evolving, trying to find its rhythm in the African insurance ecosystem. It is an opportunity for our country to be able to take the shot at the lead having Mr. Tope Smart as the President of the Pan-African Insurance Organisation. We are expecting a very strong leadership. We are expecting that he’s going to rally the support of other insurance heads of other African countries with a view to creating the necessary links or nexus between us and other African countries so that we can appropriately take advantage of the areas in which they have a comparative advantage.
“Recalled that this country has a lot of potentials – we have the human resource potentials by virtue of having seasoned insurance practitioners, and this is the time for them to take the advantage of the conference and maximize opportunities that abound for them in other parts of Africa.
“With Mr. Tope Smart position now, the space should be more open, through him relationship platform, information platform, should be better and we expect Mr. Tope Smart to provide a very effective leadership which would also create space for other leaders based on his integrity. We expect that Mr. Smart is going to provide enviable leadership that will open doors and even create a thirst for AIO to want to have another Nigerian President in quick succession.
“We are expecting Mr. Smart to use that vantage position to create more platforms for relationships between practitioners in the country. And what I mean by insurance practitioners, am talking about underwriters, insurance brokers and even loss adjusters, amongst others to interact with their contemporaries in Africa.
According to the Chairman Emeritus, Independent Shareholders Association of Nigeria (ISAN), Chief Sunny Nwosu, “As the president of AIO charged with the responsibility of coordinating the activities of the organization we expect him to ensure that insurance industry in Anglophone and Francophone countries in Africa strike a synergy that will make them work together to grow insurance markets.
“It’s definitely going to be a very tough job because of jurisdiction differences. You know the French system differs from ours. For some of the insurance companies from Francophone countries operating in Nigeria, it has taken them time to become used to the workings of our system. So the role of coordinating such an institution is to bring all insurance companies to understand its jurisdiction and simplify the operations in all these jurisdictions. This is no mean task. It’s going to be a very difficult one for an Anglophone trying to manage Francophone so it requires a very high experienced person to be able to manage such an organization.
“So, for me, I think Tope Smart is very experienced coming a long way and bringing up Nem to where it is today, so with that background, I don’t think he will have too much problem in managing this as President of AIO.
He must work to correct some misconceptions. For instance in Nigeria, it is a cultural thing that is what is taking insurance penetration backwards. While our Muslim brothers saying their religion does not support insurance although some of them do take it.
The Christian on the other hand said God is their source of protection and therefore was no need to take insurance. He must convince all people to embrace insurance to bring more penetration to the insurance sector. He must work to instil discipline and sanity in the industry and he must work for the good interest of the African insurance market as a whole.
Also speaking on what he expects from the new AIO President, Insurance Consultant and Analyst, Mr. Ekerete Ola Gam-Ikon, said “This year’s AIO Conference has come one year behind schedule due to the postponement following the outbreak of COVID-19 pandemic but well within the time that the Africa Continental Free Trade Area (AfCFTA) had become fully operational. So, I expect him to seek to use his tenure to strengthen the position of the insurance sector in the Protocol on Trade in Services and lay a good foundation for the years ahead.
“From this conference, he should immediately engage with the National Action Committee of AfCFTA in Nigeria and ensure the insurance industry plays a significant role, working with the Regulator in Nigeria and other African countries. One year is too short to do much yet a single action can set the tone for the future success we desire.
“He should seize the opportunity this position gives him to enable CEOs of insurance companies in Nigeria have access to what happens in other climes to promote more adoption of insurance by the populace. If we look at our challenges from poor product innovation and low adoption of technology in claims management, there are others that are better than Nigeria and we can learn from their experiences.
Importantly, I expect him to use the virtual platforms well and enable more players to embrace the use of online and mobile applications to engage customers.”
In his contributions, the Deputy General Manager, Sales and Corporate Communications Sovereign Trust Insurance Plc, Mr. Segun Bankole, said “It is a very good development for the insurance industry in Nigeria. I want to believe that this event will bring a positive turnaround for the insurance industry in Nigeria in the sense that I want Mr. Smart to ensure a high level of networking amongst Nigerian insurance companies and other African insurance companies.
“I want to see the tenure of Mr. Tope Smart working towards enriching the industry in terms of having unified rates for insurance products. I have been in the industry for fourteen years and the insurance industry in Nigeria has not been able to grow its gross premium written to one trillion and I don’t think this is a very good development for the industry.
“One of those things that is working against this from happening is the fact that there is so much cutting down of rate of insurance products. Rates are coming down but claims are growing. Let there be some level of collaboration between the industry’s regulatory authority, the National Insurance Commission (NAICOM) with their counterparts in other African countries to see what they are doing – how insurance is practised in Algeria, South-Africa, Tunisia or Morocco.
“There are some things insurance companies from other African countries should be able to learn from Nigeria and now that we have a Nigerian who is going to be the President of AIO, not just being the President, what impact? So am expecting a President that will be able to bring feasible changes to both the Nigerian insurance industry and the African insurance industry at large.
“Whether he has capacity? Yes; whether he has experienced? Yes, but how he will bring professionalism, capacity, competence together in ensuring that there is a new face of AIO in the African continent is what matters.
“We expect that he will work hard to ensure that Nigerian government makes some pronouncements that will help insurance industry in Nigeria to grow beyond what it is today,” Mr. Bankole added.
The Regional Communications Officer, Allianz Africa Sara Benazouz, speaking on what African insurers are expecting from the new AIO President said “We expect that the new AIO President stimulates the growth of Africa insurance through structural reforms: Market liberalization and deregulation, digitization, the enforcement of compulsory insurance, increased access through wider distribution, public-private partnerships, and regulation to support innovation and access have all been shown to build consumer trust and develop more resilient insurance industries with better-protected populations in comparable markets.
“We expect a more intense follow up of the implementation of the Africa Continental Free Trade Area, especially the insurance sector contribution, a keen follow up of the AIO’s strategic plan, addressing the crucial issue of premium flight and getting regulators more proactive in insurance development issues.
Mrs. Dalphine Traore, incumbent President, AIO
There are some projects which the AIO Secretariat has at heart, which the new AIO President should take into consideration and these are projects which are not only aimed at making the AIO the most authoritative voice in insurance issues in Africa but giving added value to its members. Some of these projects include Integrated Insurance Data Warehouse; AIO Chartered Insurance Programmes; AIO leadership in insurance and finance programme for Africa; AIO Insurance Mortality Table Facility for Africa and AIO Annual Report.
Another area that requires keen attention is youth employment. Our African youths have to be empowered through job creation initiatives in the insurance sector, skills up-scaling and capacity building. Furthermore, there is an urgent need to address weather-related risks.
As Mr. Tope Smart takes over the mantle of leadership of the AIO in a few days from now, we think that African insurance companies should work toward achieving the following:
Increase access through digital innovation and wider:
The digitization will enhance the appeal and affordability of risk transfer products in Africa. Underwriting and risk management will benefit from improved access to data and analytics. At the same time, technology will help streamline the insurance value chain and enhance the efficiency of administrative processes.
The main factors promoting digitization are the increasing mobile phone penetration, a large number of young people, a growing middle class and compulsory insurance schemes. Although there is a strong consensus that digitization will boost insurance sales, insurers are still cautious as to when these effects will materialize.
In general, to enable digitization to achieve the intended goals, we must start with a fundamental aspect of simplifying before digitizing. This is to reduce the complexity of processes and products to offer our customers, a unique and optimal customer experience, wherever they are.
Accelerate growth through competition, innovation, and disruption:
Competition among players has already led to significant innovation and disruption in the African insurance market, with insurers leveraging technology to target specific segments or services and cut costs. Innovative partnerships between insurers and online platforms are also becoming more commonplace. We expect this trend to accelerate. In some instances, African countries may even leapfrog more developed markets.
In East Africa, for example, Blue Wave in Kenya is servicing the mass market, making microinsurance products accessible via mobile phone. Founded in 2019 with $300 thousand in seed funding, Blue Wave generates revenue by collecting administration fees from every subscriber and a commission from each premium. The company partners with insurers and aggregators such as mobile network operators, as well as banks and microfinance institutions, to sell its products. It also leverages a mobile-based payments solution to reach customers. Solutions are offered in multiple languages, using simple terms, clear explanations, and avoid jargon to facilitate easy access.
In the meantime, Insurtech platforms such as Bismart, WazInsure and Kakbima are connecting customers to insurers, providing services such as quote comparisons, direct sales, and the tracking of policies and claims.
Push for strong partnerships with fintech and mobile money:
We discovered that there is not enough partnership with financial institutions. And when there is a partnership, it is not strong enough so that insurance companies can take full advantage. African citizens are confident in fintech and mobile money, everyone has at least 1 mobile phone. So Technology is really a way to increase the insurance penetration rate in Africa.
Use regulatory supervision to get to consolidation:
Several African governments are strengthening regulatory and capital requirements of insurance companies to ensure their solvency and sustainability. This is expected to help create stronger and larger companies as well as boost job creation and capability building in the industry. Such reforms are also crucial to building consumer trust and public awareness, which lay the groundwork for governments to achieve a transformation agenda.
Ensure long-term growth prospects through Pan-Africanization:
In the past six years, established insurers have tended to diversify across the continent. And expansion is likely to continue with further investment in Africa. While regional players will possibly benefit from greater integration as a result of expansion, for international players, the primary goal is to capture long-term growth. Sanlam, for example, has, through the purchase of Saham, gained a foothold in more than half of all African countries, and a top-five position in six markets outside of South Africa, while Allianz has made acquisitions in Morocco, Nigeria, and, more recently, Kenya. French multinational AXA has a presence in nine African countries, while Old Mutual has a presence in 13 African markets.
Develop Agriculture insurance and Climate risks insurance:
“There is an ever-increasing need to invest in agriculture, given the vital importance of agriculture for food security, especially in view of the increase in global population”. This is the explanation of the interest of Allianz Africa for sustainability in the agricultural sector. Indeed, agriculture production makes up a substantial portion of the continent’s GDP in Africa, yet only a small portion of the producers are insured especially the smallholder farmers segment. Agriculture insurance plays an important role in sustaining agricultural production, making the farmers bankable, contributing to employment, curbing rural-urban migration and building overall resilience of the farming sector and the whole value chain.
Recently, Allianz Africa brought together agriculture and insurance experts from Allianz Re, and partners from WARM Consulting Group Ltd and Green Triangle, Diageo PLC and other partners, to deliberate on how to improve agriculture insurance penetration in Africa, utilizing modern technology, such as remote sensing, and parametric solutions.
Meanwhile, the incoming President, Mr. Smart speaking with this medium, expressed excitement for becoming the AIO President, adding that the position, apart from giving him the opportunity to collaborate with leaders of insurance companies in other African countries, will also make a way for him to initiate and implement some of the dreams and vision he has for the insurance industry in Africa.
“I fell very excited becoming the AIO President because it will give me the opportunity to strike synergy and partnership with leaders of insurance companies in other African countries to be able to initiate and implement some of my dreams for insurance industry in Africa in general,” Mr. Smart said.
Prospects
According to Sara, “Based on the most recent statistics released by international financial institutions, Africa has strong growth prospects. In addition to that, the population growth is expected to be around 2.3% per year for the continent. The use of cell phones is spreading fast with an estimated penetration rate of around 5% per year. Household consumption is also growing at 4% per year. However, the insurance industry, important support to the economy, continues to have a low penetration rate of around 2% for the majority of markets, despite the increasing urbanization. All of the elements mentioned above create attractive growth opportunities. Our perception of the market is therefore optimistic in the medium and long term.
“We see a wide range of opportunities, which only require specific concrete actions, to rise to the ranks of the best in the world. We have to strongly promote fair competition in the market, with the sharing of best practices in terms of product design, digitalization, and innovation in distribution channels! The future is Africa!”
Conclusion
It is no doubt that leading an organization such as AIO is a herculean task, therefore the new President of AIO is expected to work in close partnership with the various blocs and all the stakeholders existing in all the markets in the continent; he must give a listening hear to all views and opinion as would be expressed by the different segments of the various markets to bring them together to ensure they work for the achievement of the objectives of the Pan-African body.
Also, apart from attempting to ensure the implementation of the new AIO’s strategic plans, the new president must work assiduously to meet the expectations of the insurance players and other stakeholders, some of which are stated above, and ensuring insurance penetration in Africa should be his main focus.
