Malvern Chirume, Chief Underwriting Officer, Africa Risk Capacity
1.What conditions are necessary for meaningful participation by sovereigns in the insurance industry on the continent?
The scope for participation of sovereigns in the insurance industry should be evaluated with the current low penetration of insurance on the continent and the obstacles that prevent the take up. Insurance should not be considered on a stand alone basis but rather the conversation should really start from a risk management perspective so that there is awareness of risk management and the various tools that are available to address those risks. It is only then that the issue of meaningful participation by sovereigns can be addressed.
The obstacles that inhibit participation are common at all levels of society (lack of
understanding of risk management, lack of understanding of insurance, mistrust due to previous experience with fly by night companies in markets where regulation was
weak. The challenges cannot be addressed by a single participant in the market. The
protection gap is so large that there should be a concerted effort by multiple participants including universities to address the challenges particularly awareness.
2.How do you see market participants collaborating to create conditions that foster a resilient African insurance market given two sides of the coin in terms of adaptation/mitigation, sustainability/development, and risk and
As indicated in the answer to the first question posed to me when one looks at the
market potential and the risks that insurance is meant to address it becomes clear that
there are alternative responses to risks which encompass different sides of the coin
and they are largely not mutually exclusive. For example the threat posed by climate
change requires both adaptation and mitigation measures.
A more resilient market requires the active participation and intentional collaboration of all participants involved in the risk management value chain such as those represented on this panel. Acting in a collaborative manner will greatly assist the demand side/prospective clients understand the options open to them and how they interlink particularly from the perspective of sovereigns who need to understand how various macro/meso/micro insurance schemes reduce risk.