Modify insurance policies to suit AfCFTA agreement – Ibn Chambas tells insurance firms, regulators
His Excellency Mohammed Ibn Chambas, has urged insurance supervisory authorities and firms on the African Continent to lobby their respective governments to change insurance policies in favour of the African Continental Free Trade Area (AfCFTA) agreement.
According to His Excellency Ibn Chambas, this is to ensure that the insurance industry benefits immensely from the trade pact which has the potential to boost Africa’s shared prosperity by attracting investment, increasing trade, creating better jobs, reducing poverty, and redistributing wealth across the continent.
In formulating new policies to suit the AfCFTA agreement, H.E. Ibn Chambas, urged insurance regulators to set rules and regulations that protect the interests of policyholders – businesses.
“The primary mandate of all members of the Association of Insurance Supervisory Authorities for Developing Countries (AISADC) being to set rules and regulations for the proper functioning of the respective insurance industries and to protect the interests of policyholders, I would urge AISADC to lobby their governments to change their policies in favor of the AfCFTA agreement,” he stated.
He made the assertion delivering the keynote address at the opening ceremony of the 22nd Conference of the Association of Insurers and Reinsurers in Developing Countries (AIRDC) / Association of Insurance Supervisory Authorities for Developing Countries (AISADC) themed, “Building Resilience in the Heat of a Global Economic Tussle.”
The AfCFTA will establish the largest free trade area in the world in terms of the number of countries that have signed on. The agreement is designed to affect the over 1.3 billion people in 55 African countries with a combined GDP of US$3.4 trillion and rescuing 30 million from extreme poverty.
It will also build momentum for sub regional market and trade integration processes such as the ECOWAS Trade Liberalization Scheme (ETLS).
Touching on the relevance of insurance to the economic growth of the African Continent, H.E. Ibn Chambas averred the insurance industry has helped mitigate negative economic hardships on Africans through the provision of financial protection.
According to him, negative economic conditions as a result of worsening macroeconomic conditions and geopolitical challenges such as rising inflation, cross-border disruptions to supply chains among others, would have been worse without the insurance industry.
“Several global macroeconomic and geopolitical challenges, such as rising inflation, ongoing cross-border disruptions in some regions, and continuing COVID-19 concerns, threaten to decrease growth and profitability.
“The difficulties associated with embargoes on some economies and the disruptions to supply chains and maritime transport have threatened our efforts to establish a global economy based on the principle of the free flow of goods and services.
“Yet, in my opinion, things would have been much worse if we hadn’t had insurance to play a critical role in promoting disaster resilience by providing financial protection and preventing negative economic hardships after the disasters,” he quipped.
Speaking further at the Conference, H.E. Ibn Chambas tasked, insurance regulators and insurance companies to have discussions in the areas of leadership and governance, regulation, technological advancement, insurance expansion and equity.
Also speaking at the Conference was Commissioner of Insurance, Professor Justice Ofori, who remarked that, the landscape of insurance especially in developing countries keeps changing due to rising policyholder expectations and technological development and as such, insurers and reinsurers have no choice but to transform their business and operating models to adapt and re-emerge stronger.
Adding that, despite the numerous opportunities in the insurance industry, the insurance market in developing countries still face some notable challenges key among which are lack of trust in insurance, unhealthy competition, bad corporate governance practices and fluctuating boardroom ethics.
