Gambia Host 37th AIO Conference and General Assembly

• Posted by Modou S. Joof on May 26, 2010 at 4:41pm
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Banjul, The Gambia (TNBES) The 37^th Africa Insurance Organisation (AIO) Annual Conference and General Assembly hosted by the Insurance Association of The Gambia and Central Bank was held in
Banjul, The Gambia from 22^nd to 26^th May 2010.

The event which was officially opened on Monday 24^th May brought together more than 500 delegates drawn from state owned insurance companies, broking firms, insurance supervisory authorities and training centres in Africa, including associate international members.

The main objectives of AIO are the promotion of inter-African co-operation and development of a healthy insurance and reinsurance industry in Africa, and the theme for this year’s Conference is ‘Survival of the African Insurance Industry in the Face of Global Financial Crisis”

“In addition to providing risk transfer services to individuals and corporations, the industry facilitates trade and commerce, mobilizes savings for investment and ensures efficient allocation of capital,” the Vice President of The Gambia said in her opening address.

Madam Isatou Njie-Saidy said it is in everybody’s interest and an imperative to support the development of a strong insurance industry in Africa. She pointed out that the insurance industry has undergone tremendous transformation over the past decade due to globalization, deregulation and terrorist attacks.

“What has not fundamentally changed is the low insurance awareness and penetration rate in Africa,” she said. 

The Gambia’s number two observed statistics has shown that the growth of insurance industry in Africa remains stunted regardless of the fact that insurance practice has been on the continent for more than a century. “Africa has an insurance penetration of roughly 1.0 percent and less than 10 percent of the insurable
population in Africa is actually insured, the industry has not measured up to other competing products in the financial services industry within the Continent, particularly the banking sector,” Madam Njie-Saidy observed.

Nonetheless, she noted that the potential for growth of the industry is huge and to realise the enormous potential, the industry must built credibility by ensuring that claims are paid promptly, technologically oriented to increase outreach, offer the right products to the right segment of the market, establish and implement
voluntary codes of good practices for better self-policing and explore market consolidation in order to reap the benefits of economies of scale.

She said the expectation at the outset of the economic crises was that African would survive but this did not happen, Africa was indeed hard hit by the crises as a result of the confluence of the fall in global trade, decline in foreign direct investment and massive reversal of private capital flows, decline in remittances, sharp reduction of revenues from tourism and reduced access to credit and trade financing.

The Deputy Executive Secretary of Economic Commission of Africa (ECA) Ms. Lala Ben Barka argued that there is no gain saying the insurance industry worldwide has and plays a pivotal role in the growth and development prospects of countries.

“For this fundamental reason, the health of a country’s insurance industry is also closely linked to the health of its economy,” she said.

Ms Ben Barka admitted that the industry performs several key functions, but particularly relevant in this context is the role of facilitating and promoting investment, which increases capital formation that consequently stimulates the production of goods and services, creates employment opportunities, generates wealth and income, induces overall economic growth and helps to reduce poverty.

Ms Ben Barka emphasize that growth in the industry is relatively low as records has it that between 2004 to 2008, seven (7) million people opened bank accounts in South Africa (heralded as a relative success story in African insurance sector), only 700, 000 people took out life insurance.

According to her, the situation is further compounded by the impact of the global financial crisis, which halted Africa’s economic recovery and cut growth from about six percent experienced up to 2007 to less than two percent in 2008.

Though the impact of the crisis on Africa’s economy has been well documented, the ECA’s number two believes the big challenge is ‘what we do to respond to the crises in order to recover and move on’.