• Posted by Modou S. Joof on May 31, 2010 at 10:59pm
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Banjul, The Gambia (TNBES) The President of the Insurance Association of The Gambia (IAG) has said that the 37th AI O Annual Conference and General Assembly offered members an opportunity to inherit, discuss and engender innovative ideas and approaches to facilitate the development of the industry.
Africa Insurance Organisation (AIO) recently concluded a five-day conference in Banjul, The Gambia, where more than five hundred delegates drawn from state owned insurance companies, broking firms, insurance supervisory authorities and training centres in Africa, including associate international members attended from 22nd to 26th May 2010.
IAG President Mr. Dawda Sarge noted in a statement that the theme “Survival of Africa Insurance Industry in the Face of Global Financial Crisis” is indeed apt and timely as it allows delegates to critically review the general effects of the global economy and its impact on the African insurance industry.
Mr. Sarge was also particular on the sub-topic on micro insurance and other emerging classes of insurance being on the discussion list in this year’s meeting. “This demonstrates AIO’s desire to mainstream the agenda on low-income people’s access to insurance products and the needs to unlock the value of righ-impact insurance programmes for poor communities,” he observed.
The story of the financial crisis is all too familiar now; however he argued that research has shown that not all financial firms were responsible or equally affected by it.
He noted that besides the troubles faced by AIG, AMBAC, MBIA and other insurers with large quasi-banking operations exposed to substantial credit risk, the crisis had a far less dramatic effect on insurers than on banks.
In fact, he said most insurers were in a position to absorb comparatively large credit losses on their balance, whereas many banks had to take recourse to public funding to avert possible financial ruin.
“Life insurance suffered greater losses than non-life insurers because of their relatively lager investment portfolios and greater exposure to exotic financial instruments,” he said, adding that due to up-front premiums, strong operating cash-flows and controlled outflows inherent in the business models of most of insurers, the industry passed through the crisis relatively unscathed.
According to Mr. Sarge those that encountered the most significant difficulties suffered through their over-exposure to non-core activities and are mostly non-African insurance.