Interesting facts about insurance in an African country
Insurance is one of the most important facets of health.It provides people protection in unforeseen illness, diseases, accidents and other harms that would require emergency care.As the home to the most number of poorest nations in the world, insurance in Africa is one the least developed industries in the world.Africa had been faced with more taxing issues such as hunger, starvation, famine and even war. The need for insurance is ruled out.Nonetheless, it must be noted that the development of the insurance industry is integral in developing the health and welfare of African nations.Here are some interesting facts about insurance in Africa.
Insurance penetration is low.Insurance penetration in Africa is low.In Tanzania, which is one of the poorest countries in Africa, it is less than 1% of its GDP.And this reality is pervasive many countries in Africa except apparently in rich African countries like Sudan, Libya, Morocco, Egypt, South Africa and Nigeria.
In poorer countries like Malawi, Somalia, Congo, Burundi and Ethiopia, a great majority of Africans remains unprotected.Many still rely on the traditional way of sourcing funds like selling their properties/ livestock or begging relatives for credit in case of emergencies. This could spell greater opportunity for growth.
Surge of Insurance market is concentrated.The insurance industry in Africa is rising faster than the global level.However, it is concentrated in a specific countries namely in South Africa, which accounts for around 70% of its growth. Other notable countries with a relatively stronger insurance market included Morocco, Kenya, Egypt, Algeria and Nigeria.
Life Premiums are preferred. Life premiums accounted for around 67% of the increase in African Insurance market. This type of insurance guarantees death benefits to benefactors upon death of the policy holder.
Insurance dominated by wealthy developed countries. Private health insurance in Africa is primarily dominated by companies from wealthy developed nations such as Discovery Holdings Limited, Liberty Holdings, CIGNA, Pacific Prime, AIG, Allianz, Metlife and AXA, among others.
Shortage of Medical and Health facilities. Save for rich African nations, there is a tall shortage of medical facilities across Africa, which is one major obstacle for expanding insurance market.
In Tanzania for instance, there is one doctor for around 30,000 people.Aside from the shortage of health personnel, there are also less medical facilities and clinics that serve the people. Poor infrastructure adds to the problem of making health services accessible to people. The limited care facilities in the continent hinders medical insurance provides to operate in poor countries.
Language Barrier.It is worthwhile to note that one major hindrance or barrier that hampers insurance and healthcare services in the African region is language barrier.There are simply very diverse languages in Africa.
South Africa alone has 13 national languages and multitude of other dialects. The need for interpreters is usually needed as the low literacy rate in poor African countries also impedes people’s ability to speak English.
Traditional way to reach out.Unlike in most developed and developing nations where insurance companies go directly to clients to sell, reaching to customers is often course through rural communities and farming cooperatives. In Africa, the blessing and support of traditional leaders is essential if not mandatory for the people to decide.This means that insurers should contact the head of a tribe before the local people can accept a proposed health insurance system.
Insurance packages unique to Africa.Insurance packages should be especially designed for Africa which would cover protection against the most common illness end diseases that plagued the continent. Aside from basic health services, it also must cover HIV/AIDS, tuberculosis and pneumonia, diarrhea and malaria, which are top deadliest diseases in the region.
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