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AfCFTA To Play Significant Role In Improving Insurance Services – Smart – Leadership News

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The African Continental Free Trade Area (AfCFTA) could play a significant role in improving insurance services through liberalisation and integration across African continent, says the president, African Insurance Organisation(AIO), Mr. Tope Smart.

Speaking ahead of the upcoming 48th AIO conference in Kenya next month, Smart, who is also the group managing director/CEO, NEM Insurance Plc, stated that,

AfCFTA is set to become the world’s largest free trade area in respect of the numbers of participating countries, which, he said, would aid insurance penetration across Africa.

To him, “we believe that the AfCFTA could play a significant role in improving insurance services through liberalisation (eliminating non- tariff barriers and refraining from introducing new ones) and integration. The AIO shall advocate for integration of the African insurance industry in the AfCFTA implementation.”

With governments increasingly using insurance to achieve public policy objectives, he noted that, the AIO, through its advocacy role, shall seek to advance the policy interests of Africa’s insurance industry, to create a conducive and enabling environment for insurance in Africa to thrive.

As AIO clocks 50 years, he said, the African insurance industry still suffers from very low insurance penetration rates, when compared to global rates, with an average of less than 2%, aside South Africa.

‘This on one hand shows the weaknesses of our industry and on the other the vast potential yet to be exploited,’ he pointed out.

To him, “according to a 2018 Lloyd’s publication, even a 1% increase in insurance penetration will reduce the disaster recovery burden on developing countries by 22%. We believe it is our mission to improve insurance penetration via solutions that improve access to insurance, the reputation of the African insurance industry and insurance awareness in Africa.”

As part of measures to address this challenge, he appealed  to different markets to scale up it’s advocacy initiative by collaborating with various organs of government to advance the course of Insurance as this will lead to increased penetration.

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