President Paul Kagame wants Africa’s insurance firms to focus on the long term prospects because the future holds very attractive opportunities for growth.
Kagame is officiating at the ongoing 42nd Annual General Assembly of the Federation of African National Insurance Companies #FANAF2018.
This is the third time Rwanda hosts the FANAF general assembly having previously hosted the continental insurers’ event in 2004 and 2012 respectively.
Kagame wants the insurance firms on the continent to get more innovative and tap into available opportunities that the growing African elite are offering. “Insurance is not about compensating for misfortune,” He cautioned.
According to the President, “We [Africa] have a long way to go. But there are two pieces of good news. First, while these statistics may be unattractive, there is clearly a huge opportunity for future growth, particularly as Africa’s middle class expands faster than anywhere else.”
In support of his statement, Kagame reminded the insurers that one out of every six people on the planet is an African, representing nearly 17%. But the president is concerned that yet Africa generates only 1.5% of global insurance contracts, around 75 billion dollars, as of a few years ago.
“The very nature of the insurance business requires firms to take a longer-term perspective in their lending, than commercial banks are able to do,”Kagame said.
Kagame who recently assumed responsibilities as chairperson of the African Union notes that insurance companies are very important to growth of economies because they invest in customer premiums, they mobilise savings toward domestic investment increasing the size of feasible projects in the national economy.
For him, insurance should do more than compensating for misfortune.
“The more advanced an economy, the greater the size, diversity, and efficiency of its insurance market. Indeed it is fair to say that insurance underpins prosperity and innovation,” Kagame told insurers.
However, the president says insurance has been slower to adopt these innovations yet services are the fastest-growing segment of the global economy, already accounting for 70% of output and 60% of employment according to the World Bank.
“Insurance services are an important part of that picture,” Kagame says.