Continental Re Managing Director, Dr. Femi Oyetunji, said African insurers needed to unite and collaborate to grow to a capacity that would allow local carriers to retain more of the risks and offset an over-dependence on international players, the Guardian Nigeria reported.
While speaking of the impact the carrier has had on the continent, Oyetunji called attention to what he sees as a growth vacuum amongst African re/insurers.
He highlighted the relatively small market space currently filled by African carriers, stating that two global insurers combined write over 30 times the businesses of all African reinsurers and insurers put together.
The Managing Director called for insurance regulators to reinforce the position of local carriers through ensuring foreign carriers can pick up only once local capacity is exhausted.
He said, “Too many projects are agreed at the highest levels without the industry being able to out-forward its arguments.
“The industry should work together to enable it to compete with the global players in a meaningful way. We are heavily dependent on external factors, but there are opportunities to take greater control of our destiny.
“If I could wave a magic wand for the next 30 years of business, it would be to have enough capacity that we could write the business we choose, without compromise.
“With that capacity, I would be able to do the things that the big globals are doing – and not just in terms of underwriting. We would be able to use insurance as a mechanism to lift more people out of poverty. But no-one is going to help us with that – we have to do it for ourselves and to work together to achieve that.”
Nigerian-based Continental Re has been one of the trailblazers of African reinsurance and currently services over 200 insurers throughout the continent, with main offices spread across Nigeria, Cameroon, Kenya, Côte d’Ivoire, Tunisia and Botswana, and a specialist subsidiary – Continental Property and Engineering Risk Services, registered in South Africa.
Local carriers with increased capacity could help to spread insurance penetration throughout the continent, especially as domestic firms have the potential to be more successful in marketing efforts, with less cultural and regulatory barriers to cross than foreign re/insurers.
However, concentrating too much risk locally could defeat the purpose of re/insurance by removing the safety net that diversification of risks provides.
An efficient reinsurance structure relies on a global spread of assets, so an overtly protectionist stance for African re/insurers could mean re/insurers are impacted by the very risks they protect against – meaning local economies and re/insurers would be spinning their wheels.
