The African insurance community has weathered the storm of Covid-19 very well and remains hopeful, according to Godfrey Kiptum.
The CEO of Kenya’s Insurance Regulatory Authority told delegates attending the OESAI Conference and General Assembly in Mombasa: “As the pandemic has demonstrated, financial shocks can set people back. The World Bank has estimated that the pandemic has resulted in between 19 and 24 million people becoming the new poor in the past year.
He said that countries with stronger safety nets are faring much better, adding that in Africa, while the safety nets may not have been there, governments are working hard to make a difference. One of the issues for African governments is the informal mechanisms that people rely on in tough times. People will turn to traditional sources of funding, he said – family, friends etc – rather than insurance, which ultimately depletes savings and threatens long-term futures.
The regulator said insurers have a role to play in informing people of the alternative way that insurance could support them. Mr Kiptum acknowledged that there has been an impact on insurance sales as a result of the pandemic but he said: “The good news for insurers was that claims also went down, so overall there were some good underwriting results.” Overall, he remains optimistic that the insurance markets will be resilient through the crisis.
“Of course, insurance regulators have played their part too,” he said. “Regulators have made it much easier for insurers to continue to do business and provide secure services to clients. Even those insurers that did face challenges have been able to weather the storm and are getting on well.”
In the last few years, said Mr Kiptum, insurance regulators have given a lot of guidance to insurers about products and services. They have also encouraged insurers to work proactively with insureds to encourage them to maintain insurance coverage. Now, as the pandemic rolls on, he called on insurers to treat customers empathetically, particularly as people face tough times.
“Globally, insurance rates are hardening and we will see insurance premium levels rise in the next year,” he said, urging the industry to remain optimistic and resilient.