- East Africa’s insurance coverage sector regulators held the seventh Particular Assembly of the Government Committee (ExCo)of the East African Insurers Supervisors Affiliation (EAISA) in Kenya on Friday.
- The East African insurance coverage supervisors have resolved to advertise the event of cross-border insurance coverage services collectively.
- The members have additionally agreed to coordinate joint innovation initiatives referring to insurance coverage improvement in member states.
Joint resolve for East Africa’s insurance coverage sector supervisors
The East African insurance coverage supervisors have resolved to collectively promote the event of cross-border insurance coverage services to handle the challenges of low insurance coverage uptake and penetration within the area.
The members have additionally agreed to coordinate joint innovation initiatives referring to insurance coverage improvement in member states.
Working beneath the auspices of the East African Insurance Supervisors Association (EAISA), the supervisors, at their seventh Particular Assembly of the Government Committee (ExCo) assembly held in Eldoret, Kenya, additionally agreed to make use of a joint method in supervising systemically essential insurance coverage teams.
They are going to monitor cross-border trade stability and coordinate the institution of insurance coverage supervisory schools.
Talking on behalf of all of the EAISA members, the Exco Chairman Alhaj Kaddunabbi Ibrahim Lubega, Chief Government Officer of the Insurance coverage Regulatory Authority – Uganda, famous the significance of coordinated regional initiatives referring to analysis and improvement for efficient coverage improvement and implementation.
He mentioned EAISA was dedicated to constructing capability throughout the member nations as they search to implement trade integration initiatives.
Throughout the assembly, the supervisors adopted the primary EAISA 2024/2025 – 2028/2029 Strategic Plan.
The regional insurance coverage panorama is headed for main modifications with the Strategic Plan’s approval. The member nations should harmonise their authorized and regulatory frameworks to supply a unified basis supporting cross-border insurance coverage operations by September 2025.
The members even have as much as June 2025 to develop and undertake threat administration and solvency requirements to make sure that insurers throughout the area preserve sufficient monetary reserves to cowl potential dangers and solvency necessities.
Learn additionally: EAC member countries move to tear down non-tariff barriers
The Plan is drawn alongside 5 thematic areas: insurance coverage trade stability, insurance coverage market improvement and innovation, shopper safety, institutional sustainability and cooperation, collaboration, and trade integration.
It has recognized 11 key consequence areas, together with claims dealing with and settlement, truthful pricing practices, innovation hub institution, product diversification, insurance coverage inclusion, market enlargement, disaster administration, stress testing, and market surveillance.
It envisages growing and adopting regional frameworks for data change sharing and information standardisation, group-wide threat evaluation, and cross-border supervision framework.
It additionally places in movement plans to develop and undertake regional frameworks for monetary literacy or insurance coverage training, risk-based supervision, certification for insurance coverage professionals and actuaries, and market conduct and insurance coverage claims pointers, amongst different issues.
The Assembly was hosted by the Insurance Regulatory Authority, Kenya, and attended by Lubega (CEO of IRA – Uganda), Godfrey Kiptum ( Commissioner of Insurance coverage and CEO, Insurance coverage Regulatory Authority Kenya), and Nationwide Financial institution of Rwanda Government Director Doreen Kahonda.
Others had been Tanzania Insurance coverage Regulatory Authority Deputy Commissioner of Insurance coverage Issa Stated Khadija, Autorité de Régulation et de Contrôle des Assurances (ARCA) – The democratic Republic of Congo Consultant to the Director Common Emmanuel Mutatsh and Mr. Désiré Nimubona, Consultant to the Secretary-Common – Agence de Régulation et de Contrôle des Assurances (ARCA) – Burundi.
Additionally current had been members of the Strategic Plan’s Technical Working Group drawn from the entire Affiliation’s member states.
The assembly comes when the EAC insurance coverage markets deal with points associated to market volatility, local weather change dangers, cyber dangers, and geopolitical developments.
Additional, frontier dangers proceed to disrupt provide chains and pose new challenges to present coverage, regulatory, and supervisory frameworks.
Insurance coverage penetration
The transfer comes because the East African Neighborhood (EAC) nations proceed to wrestle with insurance penetration charges, which, in response to consultants, presents a major progress alternative for the sector.
Penetration can be low in Africa, together with in key economies akin to South Africa and Nigeria.
Whereas insurance coverage offers an important security web for patrons vulnerable to exterior threats, together with well being points, financial disruptions, and pure disasters, it has, for a lot of Africans, been unavailable–solely three per cent of Africa’s GDP is pushed by insurance coverage, lower than half the world common of seven per cent.
Africa’s mixture insurance coverage penetration price is at a paltry 2.78 per cent, in comparison with the worldwide common insurance coverage protection price of seven.23 per cent.
Within the EAC, Kenya leads, albeit with a paltry 2.43 per cent penetration.
Rwanda follows it with a 1.70 per cent penetration, Uganda (0.84 per cent), Burundi(0.77 per cent) whereas Tanzania has a 0.53 per cent penetration.
Threats to insurance coverage uptake
In line with trade consultants, some threats hindering the growth of the insurance sector and the uptake of insurance policies embrace low insurance coverage consciousness.
“The low stage of insurance coverage consciousness and low public confidence in insurance coverage companies inside member states pose a major menace. This undermines insurance coverage uptake and trade progress,” Kiptum mentioned.
There are additionally problems with lack of ability to deal with technological modifications due to the fast tempo of technological shifts.
Geopolitical dynamics are additionally affecting insurance coverage penetration, in response to consultants.
This consists of conflicts and commerce disputes, which influence the soundness of the insurance coverage trade inside EAC.
Pure disasters and pandemics akin to Ebola and the current COVID-19 pandemic are different components disrupting enterprise operations inside EAC and impacting the underwriting enterprise.
Political instability and uncertainties additionally have an effect on regulatory initiatives and cooperation.
“EAISA should discover methods to introduce micro-insurance and attain underserved markets, thereby increasing the insurance coverage trade’s footprint inside EAC,” the management mentioned in a press release on Friday.
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