Inga Beale, Chief Executive Officer (CEO) of Lloyd’s of London, has suggested that mobile technology is key to both supporting economic growth and driving re/insurance penetration across Africa.
Although Africa has generally been late in its transition from analogue to digital technologies, the continent has essentially leapfrogged computers and landlines and embraced mobile technologies, with over 80% of Africans now owning a mobile phone, according to the International Telecommunication Union (ITU).
Mobile services also accounted for 8.2% of sub-Saharan Africa’s GDP in 2017 according to the Global System for Mobile Communications Association (GSMA), due to their ability to stimulate financial development.
Addressing the African Insurance Organisation (AIO) at its 2018 Conference and General Assembly, Beale explained that mobile technology is particularly important to the farming industry, as smallholders can use it to check market prices, and market traders can accept money digitally.
She also referenced a study by MIT, which found that 2% of Kenyan households were lifted out of poverty between 2008 and 2014 simply by gaining access to M-Pesa, Kenya’s mobile-money service.
“When it comes to insurance,” said Beale, “we as a sector have an enormous opportunity to tap into Africa’s mobile economy, and make some significant progress on increasing access to insurance products and closing the protection gap.”
Nearly 90% of economic losses caused by natural disasters remain uninsured in low-income nations, but Beale asserted that “InsurTech could be a game-changer when it comes to access and provide insurance products across harder to reach markets.”
She predicted that, over the next five years, re/insurers will increasingly rely on emerging technologies like advanced data analytics, artificial intelligence, and digital and mobile platforms to drive innovation and penetrate new markets.
Beale also pointed to the influx of InsurTech start-ups in the market, commenting: “New competitors are looking at how they can use digital mobile technology to cut costs, improve customer service and sell direct without the need for brokers. Others are looking at web-based brokerages, which can be faster and cheaper than established networks. All are using data to improve risk-assessment and customer service.”
She maintained that Lloyd’s is committed to driving technological innovation, referring to the new Innovation Lab that Lloyd’s plan to establish later this year, which will test new InsurTech concepts and ideas in a fast-track environment with support and involvement from the Lloyd’s market.
Beale’s comments at the 2018 Conference and General Assembly follow the results of the AIO’s 3rd African Insurance Barometer, which polled attendees, finding that African re/insurers are confident about the outlook for their industry as the continent’s economy begins to gradually recover.