Finance Minister charges West African insurers to reposition industry

Dr Zainab Ahmed, Minister of Finance, Budget And National Planning, on Monday charged insurers across West Africa to strategise on repositioning the insurance industry in the continent for global competitiveness.

Zainab said this at the 50th Anniversary of the West African Insurance Companies Association (WAICA) 2023 Educational Conference, hosted by Nigeria, in Lagos, with the theme: “Repositioning Insurance Industry in West Africa for Global Competitiveness.”

She was represented by Mr Sunday Thomas, Commissioner for Insurance/Chief Executive Officer, National Insurance Commission (NAICOM).

According to her, insurance in the whole of Africa has been characterised by low penetration and poor contribution to most African countries’ financial growth.

Ahmed said maintaining efficient, fair, safe and stable insurance market in the West African sub region must be promoted for the benefit of the policyholders and other stakeholders.

“As an optimist, we are encouraged to believe in a new dawn, leveraging technological innovations and a positive paradigm shift, focused and poised to meet the anticipated surge in the demand and untapped side.

“In modern business environment, disruption plays an integral part of any business.

“The insurance industry, like other components of the financial system, is changing in response to a wide range of global social and economic forces.

“In particular, insurance and insurance-linked financial activities are increasingly crossing national and sectorial boundaries,” she said.

According to her, the 2023 WAICA educational conference could not have been more aptitude, in view of the overarching objective behind the African Continental Free Trade Area (AfCFTA) to accelerate intra-African trade.

Ahmed emphasised on the need to establish high quality insurance database to provide a holistic view of the industry’s operations in the sub-region.

The Finance Minister encouraged WAICA members to leverage technology and other alternative distribution channels to increase market penetration.

She said that multilateral cooperation must be enhanced with the objective of promoting international standards and foster favourable investment environments and orderly markets in the West African sub- region and beyond.

“Consequently, it has become imperative for the Insurance supervisory systems and practices to continually upgrade in order to cope with these developments.

“This is to mitigate possible financial and systemic stability concerns arising from the insurance sector as they emerge.

“I congratulate all WAICA delegates on the occasion of the association’s golden jubilee and wish you a fruitful deliberation,” she said.

In a panel discussion, Mr Ganiyu Musa, Managing Director, Cornerstone Insurance Plc., urged WAICA members to go for international rating cycle to boost their profile and confidence of the public on their companies.

Musa explained that ratings was key and deeper than audit to consumers, because such recommendation from an independent third party, shows the credibility of a company to the consumers.

He noted that African insurers go to rating from a disadvantaged position, hence, to achieve stronger rating, they must have the modelling of the risk and capital allocation.

WAICA was established in1973, with the purpose of improving the image of the insurance industry in West Africa.

The association assists in creating an enabling environment for industries and economies, by promoting cooperation in every respect amongst all the insurers and reinsurers companies operating in its sub-region.