Opportunities of Digital Innovation in Insurance in Africa: Post-Event Summary

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Opportunities of Digital Innovation in Insurance in Africa: Post-Event Summary

On September 21st and 22nd, the online conference ‘Opportunities of Digital Innovation in Insurance in Africa’ was held in French and English. The event was organized by West Africa Business School, the African Bancassurance Academy, led by Obasi Ngwuta (Managing Director), and Mobile Convergence Ecosystems Ltd., led by Jean-Stéphane Gourévitch, its CEO and Founder.

With +500 attendees registered for this virtual conference, and over 40 senior executives from major insurers, reinsurers, regulatory authorities, insurtech start-up’s, global management consulting and law firms, the conference was sponsored and partnered by Munich Re Africa, DWF Law firm, the International Finance Corporation (IFC), and the Global Index Insurance Facility (GIIF), a dedicated WBG’s program created to facilitate the access to finance for smallholder farmers, micro-entrepreneurs, and microfinance institutions through the provisions of catastrophic risk transfer solutions and index-based insurance in developing countries. This event was also supported by Deloitte and the Conférence Interafricaine des Marchés d’Assurances- CIMA, the regional insurance regulator in West and Central Africa. Financial Afrik and Atlas Mag Insurance collaborated as media partners.

Among the participants from across various continents; the dialogue also counted with high level representation from the WBG,CEOs, and Directors, from major insurers and reinsurers, mobile insurance providers from such as Allianz Côte d’Ivoire, Allianz Africa, Ayo Intermediaries Côte d’Ivoire, Hannover Re France and Francophone Africa, Munich Re Africa, Sunu Group, MAU Mauritius, and East Africa, Activa DRC and Activa Group, Finca DRC, Mercy Corps. Ventures, Wafa Assurances Group, Deloitte Africa, DWF Law firm, Axionable, to name a few.

The participation of start-ups such as Baloon Africa, REMA Medical, Tradein, Hub2, Everledger, Unfrauded, Soso Care, Hadiel, Assuraf, Binah.ai, Technatium, Djoba Cash, and many others. As well as the crucial comments by the senior representation from the CIMA, and the General Secretary of the Organisation of Eastern and Southern African Insurers – OESAI contributed to enrich the conversation. Finally, the vision of Sabine VanderLinden on sustainability and insurtech; and the intervention of Zach George, the CEO of Launch Ventures Africa, on how to support entrepreneurship and innovation in insurtech in Africa were also important additions to this two-day discussion.

Digital and mobile technologies have become crucial for overall competitiveness, deeply transforming many industrial and economic sectors, offering new products and services for consumers, and creating new risks. Among the most transformed sectors by these technologies, the banking, payment and insurance sectors -whose role is fundamental in the global economy- are undergoing profound changes that have been most vigorously demonstrated in Africa.

In the insurance sector, although efforts to harmonize national regulations and open markets have been underway for many years, particularly under the incitement of the Inter-African Conference on Insurance Markets (CIMA), the development of digital innovation and digital insurance is more recent. Insurance is a key sector of the economy, for both individuals and companies, and is the indispensable -sometimes mandatory- foundation of many economic activities, including individual and collective health, provident and pension schemes, accidents of all kinds, transport, agriculture, natural disasters, among others. Even though, some countries are experiencing growth in the sector as is confidence in insurers, insurance penetration in Africa remains low with less than 3% of participation. New risks are constantly emerging, the most recent being cyber and IT threats, and climate change. Access to insurance and the widest possible coverage of citizens are key debates impacting the most fragile people and facing financial exclusion due to various factors such their socio-economic status.

Digital technologies and innovation can enable the development of new products and services at lower costs and better adapt to the new behaviours and lives of consumers and citizens, cover new risks, enable the development of micro-insurance and mobile insurance aimed at people in financial exclusion, and make insurance coverage more universal. They also allow insurers to better understand and manage their relationships with their customers, and to reduce risk of fraud. Finally, digital technologies and innovation also permits to open new competitive spaces to new players, such as telecom and digital operators, entrepreneurs, and start-ups.

This conference discussed in a holistic and detailed way the best areas market players and innovators/start-ups can best work together, the strategic benefits, opportunities, and risks of digital innovation and transformation, and the new emerging business models. We have heard from the experiences of remarkable African and International start-ups leading the path towards innovation and digital transformation in insurance.

Some of the key messages delivered stressed the fundamental fact that Digital Innovation and transformation are here to stay and are strongly impacting the industry. There is also a strong conviction that digital transformation is much more than adding a new distribution channel, it forces industry players to think about who they are, their strategic objectives, and their organizations. There is no doubt that this change is also pushing to create a more digital and innovative culture within the organizations.

Participants expressed their conviction that digital innovation – including collaboration with innovative start-ups – could help the industry be more efficient, improve processes, reduce bureaucracy, and in particular address the debatable issues related to the time needed to pay claims to policy holders (one of the most recurring inconveniences holding back the growth of insurance in Africa). Finally, it is indisputable that digital innovation can provide new and better ways to enhance financial inclusion, micro-insurance, and the development of inclusive insurance in Africa. Digital Innovation can also support the insurance fight against climate change and enhance sustainability.

The World Bank Group/IFC session titled: A key role in insurance innovation in Africa, supporting insurtech entrepreneurship and financial inclusion’  highlighted the crucial role of the World Bank Group supporting sustainable development but also focusing on insurance (Global Index Insurance Facility-GIIF).

In particular, the WBG/IFC delegates explained in detail how the institutions work with Governments and market players in adapting the insurance legal and regulatory frameworks, supporting reforms and innovation. They also detailed the objectives of these institutions in the market, public policies, and innovation developments in insurance for the upcoming years. They gave a detailed vision of how their work is supporting directly and indirectly entrepreneurship and insurtech start-ups across Africa.

“IFC aims to work with the private sector in order to come up with solutions to reduce the global protection gap (USD 700 billion) and increase the penetration rate of insurance across different emerging markets through capacity building; technical and strategic advice for better administrate their businesses; innovative solutions; climate risks; global network and mobilization; strategic growth capital; institutional endorsements; and political risk mitigation. IFC has committed over the past 20 years over USD 2.5 billion in +100 projects across more than 30 countries. It is also true that COVID-19 accelerated the use of online insurance. Insurtechs across the globe recorded the highest investment amount (USD 7 billion)”. 

-Zeeshan Ahmed Vazeer, Senior Insurance Specialist at the IFC.

Some of the 3 key priorities mentioned in this session, (1) the importance of investment in new technologies and insurtech start-ups; (2) working closely with regulators; and (3) Increasing the trend towards bundling insurance. The momentum to focus on supporting financial inclusion is building up in the continent. Indonesia -where the access to insurance now is immense- can be an example of that. People who never thought about the idea of buying an insurance are now seeing insurance as a part of a possible daily purchase. It is important for the WBG/IFC to work on increasing the access and supporting the financial sector, building the capacity of the regulators, training them, making sure they have the tools to supervise the insurance sector properly.

Jean-Stéphane Gourévitch, the co-organiser and conference host stated that:

“The online conference was one of the major virtual events Mobile Convergence Ecosystems Ltd. has had the pleasure to organize about digital innovation and transformation in Insurance in Africa since 2020, and probably one of the best. The breadth of topics covered, and the quality and involvement of the speakers have been real assets. The amazing support from the WBG/IFC and particularly from the Global Index Insurance Facility was really second to none. Their role in supporting reforms, innovation, entrepreneurship, and insurance inclusion in Africa and beyond is massively important for the sector. With new risks such as pandemics and climate change growing, new challenges are affecting the insurance industry. GIIF’s support to digital innovation, inclusion, and resilience is crucial to protect and benefit to the African people and sustainable development”.

With a big Thank You to WBG/IFC keynote speakers for participating on this conference:  Alphonsus Nji T Achomuma, Senior Financial Sector Specialist; Zeeshan Ahmed Vazeer, Senior Insurance Specialist, and Agrotosh Mookerjee (Consultant Micro-Insurance Actuary). And for those collaborating to the existence of forums like this: Jean-Stephane Gourevitch (Convergence Ecosystems Ltd.); Obasi Ngwuta (West Africa Business School); and Fatou Assah (Global Index Insurance Facility). Please click here if you didn't have the chance to attend or if you would like to see WBG's representatives participation one more time.