“Why pay for it when it might not happen?”
“It’s not my portion.”
WThese are typical reactions to getting insurance in Africa.
So why do people respond this way?
Culture: Insurance should be bought for its value but many Africans buy insurance only to avoid being penalised. And in cases where there’s no penalty - in Ghana, for example - funeral insurance is more prevalent because of the importance attached to deaths.
Affordability: In Africa where everything is competing for food, it’s easy to see why getting insurance is seen as an afterthought. Some even admit that if not for healthcare coverage from their employers, they wouldn’t bother.
Trust issues: Insurance companies have a reputation for not being straightforward, many do not clearly state the scope of coverages until an incident has occurred.
COVID-19 related health claims
This year has tested the insurance industry. As per Centri
, in March the Insurance Regulatory Authority in Kenya announced that all health-related COVID-19 claims would be honoured by insurers.
Despite the initial agreement, as COVID-19 related health claims started trickling in, the industry began to backtrack on its commitment in July.
But companies like Prudential Life, which operates across eight African markets, added a free new COVID-19 life insurance cover to existing and new clients and staff across their markets.
Other companies including Hollard Mozambique and Naked Insurance in South Africa provided relief measures like premium holidays and reductions to help take some financial burden off customers.
The state of Insurance in Africa
According to a report on the global insurance market in 2019, Africa accounts for only 1.08%
of global turnover compared to other regions, it’s only larger than the Middle East which accounts for 0.71%.
, the largest markets in terms of turnover are South Africa (69.10%), Morocco (6.81%), Kenya (3.29%), while in terms of the development of insurance (density)
, the largest markets are South Africa, Morroco, Namibia.
The adoption of Insurance in Africa still has many hurdles to scale. How do you think these hurdles can be scaled?