With so much challenging economies, from wars around the world, climate change and tough economic times, insurance is a vital tool to protect businesses and help them survive, said the Mauritian minister of finance.
Speaking at the opening of the African Insurance Organisation Reinsurance Forum in Mauritius, Dr Jyoti Jeetun, Minister of Financial Services and Economic Planning, stressed “Insurance and reinsurance is becoming increasingly important.”
“Insurance cannot cover every shock, but it can help businesses survive one. It can give investors confidence to proceed with the project and reinsurance plays a really important role by providing additional capacity to insurers, helping them to manage large and complex exposures and supporting them by providing capacity in markets where risks might remain otherwise uninsured,” he said.
“Ultimately insurance and reinsurance are about creating the environment and confidence required to give business the capacity to recover.”
She pointed to the example of a small holder farmer from her own constituency who is unable to find affordable insurance to protect his farm. The minister said much of the problem lay in a lack of information about the risks, which made it difficult for insurers to properly price the risk – and if they could price it, the rate would be unaffordable for the farmer.
Since coming into power in 2024, the government has brought together a local insurer and the farming community to address the problem. Artificial intelligence (AI) has helped pool the date and now the insurer has the support of three reinsurers.
Jeetum is hopefully a viable policy will emerge which serves not only the farmer but also the insurance sector.
“Just imagine,” she said, “if we can roll this out, not just across Mauritius but across the continent of Africa. But protection must deliver and be affordable if it is to serve its purpose.”
She believes AI will have a very useful role to play, helping insurers and reinsurers in delivering the goal of expanding cover to more Africans and boosting penetration rates. This will in turn provide invaluable support for economies more broadly.
The minister spoke about the “Africa premium” that companies have to pay to do business on the continent which she said was extremely damaging to the chances of overall success.
“Having a continental free trade area has the potential to transform African economies,” she believes. But she cautioned that in itself having the regulations would not be enough. Businesses need confidence to invest, she said, and that is something they can gain from having the right insurance in place, which will assure them payments will be paid, political risks will be managed and commercial losses can be absorbed.
Where appropriate insurance is unavailable, businesses may be reluctant to move into a country, she said.
“The challenge is not to pretend that African markets are not risk free, it is to develop institutions and the financial capacity that allows risk to be assessed and managed. This is where special insurers and reinsurers can provide solutions designed to the realities of developing markets and help unlock transactions, support debt rates and give investors confidence to come into the region,” said Jeetum.
Mauritius itself has become a financially mature market and the minister said its ambition: “We want our international financial sector to be a place where expertise is built, sophisticated financial services are delivered and international presence can grow.”
This is important, she said, to reinforce the country’s position in an increasingly competitive global services industry.
“Financial services will have a very central and significant role to play as we work on our Vision 2050. The ambition for the sector is to contribute more than 25% of our GDP, supported by innovation, high value activities and making international connections stronger based on our skills and expertise,” she said.
“Achieving that ambition will require us to be transformative and attract business that will create genuine economic value. We must invest in our people, embrace new technology, while upholding the highest standards of governance.”
AI will help in that journey, she said, while stressing that AI is not the ultimate solution but simply a tool which enables market experts to deliver. Insurers and reinsurers will always remain accountable, she said.
“AI can help with our market risks but underwriting discipline must remain. We must remember that for the farmer, the issue is not the insurer having data, or the ability of that insurer to analyse that data. It is in producing a product that protects his farm and gives him confidence to invest in his next crop.”
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