At 5pm the domestic currency was bid 2c stronger than the same time bid on Tuesday at R14.80 against the dollar.
At 5pm the domestic currency was bid 2c stronger than the same time bid on Tuesday at R14.80 against the dollar.

Lack of insurance in Africa leaves millions vulnerable to climate change, natural disasters

By African News Agency Time of article published Nov 7, 2019

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JOHANNESBURG -  Millions of low-income households and small businesses across Africa still have no insurance, leaving them vulnerable to climate change, natural catastrophes, food insecurity, accidents, illness and untimely death, a report launched on Thursday shows.

The Landscape of Microinsurance in Africa 2018 report launched at an international conference on inclusive insurance in Dhaka, Bangladesh, is based on data collected on the microinsurance activities of 100 insurers in Africa in 2017.

The insurers collectively covered 15 million lives, almost two percent of the estimated 700 million people in the continent's low-income bracket, and brought in total premiums of US$ 420 million, representing less than one percent of overall insurance premiums in Africa.

“Insurance should play a vital role in lifting millions of people out of poverty,” said Katharine Pulvermacher, executive director of the Microinsurance Network which commissioned the study with the support of the government of Luxembourg, Munich Re Foundation, the Center for the Economic Analysis of Risk at Georgia State University and AXA.

“Insurance can build resilience to crises and disasters, and boost productivity, food security and well-being. But our study shows that only a tiny percentage of insurance business in Africa caters for low-income people and the emerging middle class."

Crop and livestock insurance, for example, are still struggling to reach most farmers facing climate and extreme weather risks. In certain countries, the implosion of “freemium” insurance policies sold through mobile network operators significantly reduced the number of people insured. 

Officials said it was unclear whether these statistics represented a genuine, worrying trend or were due in part to a lack of relevant recent data reported by insurers or collected routinely by regulators.

Out of 44 countries targeted in the research, only six yielded usable data on premiums collected and lives covered. 

One positive trend is in inclusive health insurance products, which are experiencing something of a boom. Insurers are supporting comprehensive public schemes, while hospital cash and health value-added services are also increasingly popular.

“The positive trend in inclusive health insurance shows that insurers have been able to offer value to customers and governments in a sustainable way,” said Quentin Gisserot, project manager at AXA Emerging Customers.

“We’re also seeing new distribution opportunities emerging such as fintech players, e-commerce and ride-hailing platforms.”

- African News Agency (ANA)

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