Managing customers’ needs and gaining their respect are the biggest challenge for insurers across Africa, according to the results of a new survey from Munich Re.
Insurers across six markets were asked what they believe to be the biggest challenge facing the industry, and meeting customer needs was among the key challenges.
Other challenges on the list included lowering costs and keeping up with technological changes.
Speaking at the Organisation of Eastern and Southern Africa Insurers (OESAI) annual conference in Cape Town, Greg Becker, of Munich Re, who ran the survey, said the respondents also admitted their organisations faced tough challenges in keeping up with the competition and regulatory compliance.
Asking the question separately of the non-life and life sectors, Mr Becker said almost three quarters of the OESAI survey respondents felt insurers were fi ghting over the same pie instead of growing the pie.
He said: “We have asked people in many markets a question about what they think the growth rates will be in the near future – and we do this in the full knowledge that the current penetration rates are very low.
“Th e OESAI respondents – largely non-life focused – echoed the respondents from Kenya, Mauritius, South Africa and Uganda: the overwhelming view was that growth rates will be between 2% and 5%.
Unfortunately, with the current penetration rates being 1% or 2% in most countries, growth rates like this will not make a material diff erence to the penetration rate.
” Instead, he suggested: “For insurance penetration to increase materially, the industry will have to respond and we will need the environment to be more fertile.
Th e more assets they have, the more verifi able they are, the more will be insured.
“Economic growth rates would obviously produce a boost, but that is not to say that the industry can throw its hands in the air and say thepenetration rates are low for things beyond their control.
” Mr Becker said diff erent groups were trying to address the issue.
For example: “Regulators have assisted with fi nancial education, industry bodies have helped to align competitors and new entrants, and the innovative are fi nding new partners and distribution channels.
” However, he had a warning for the market: “I am sure that if we keep doing what we are doing, there will not be material growth, but that some disruptors will bring compelling, customer-focused off erings to market, which are more accessible, more appropriate and more aff ordable.
” – Commercial Risk Africa
