Nicholas Wells, Senior Client Manager at Switzerland re- insurance firm, Swiss Re, told an insurance forum in Nairobi that most international insurance companies are looking to diversify their exposure away from home markets and Africa represents a good opportunity.
"We are likely to see more global insurance firms set up presence in Africa through acquisitions of local insurance firms or by setting up offices in the continent in the future," Wells said during the 5th Annual Africa Insurance and Reinsurance Conference.
The two-day event brought over 100 participants to review ways of expanding Africa’s insurance sector.
Wells said Africa has one of the lowest penetration rates for insurance services in the world as insurance is seen as a rich man’s product.
He stated that Africa still accounts for a tiny fraction of the global insurance premium collected annually despite its huge population.
"However, we expect that the growing middle class will increase the continent’s uptake of insurance services," he said.
According to him, South Africa and Kenya have relatively advanced insurance firms "due to presence of conducive insurance regulatory regime that has attracted private sector investment flows."
Indian insurance firm, GIC Re., South Africa Chief Operating Officer Sandip Karmarkar said that Africa’s fast growing economies are creating the need for insurance services.
The company acquired South African based Saxum Re insurance last year.
Karmarkar said that recent oil and gas discoveries will also help to spur the growth of Africa’s insurance sector, and his firm is set to increase its presence in other Africa nations.
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