It is observed that Africa scores very low in insurance uptake, pointing to a 2.8 percent insurance penetration compared to the world’s average of 6.8 percent. The insurance penetration is seemingly more concerning in Kenya as it has recently decreased. That said, Kenya’s GDP growth rate has outpaced insurance premiums, media reports said.
The low penetration of insurance is a cause for concern on the continent. It implies that there is a huge protection gap, leaving households and businesses vulnerable to shocks triggered by the coronavirus pandemic.
For that reason, the insurance industry is urged to build a client-centric approach using advanced technologies. This can help to increase client base and save those who are underinsured from unforeseen shocks.
In December, it was reported that the insurance market in Africa in a pre-pandemic setting was expected to grow at a compound annual growth rate of 7 percent between 2020 and 2025, which is twice as much as North America, three times more than Europe and above Asia’s 6 percent, according to a Mckinsey report.
Pensions and individual life insurance are considered to be the continent’s fastest growth line of business. That said, motor insurance is the biggest contributor to non-life insurance, while health insurance and property insurance have significantly grown in recent years. Last year, commercial insurance demonstrated strong performance in Nigeria, while oil and gas climbed 9 percent annually. The Oil and Gas Insurance Pool in Ghana nearly doubled from $25 million in 2016 to $48 million in 2019.