By Rosemary Onuoha in Ghana
THE President of Ghana, Nana Akufo-Addo, has said that the African insurance industry lose substantial businesses to advanced markets due to the fragmented nature of the African market.
Akufo-Addo stated this at the on-going 45th African Insurance Organization, AIO, conference and general assembly in Accra, Ghana.
Akufo-Addo, who was represented by Senior Finance Minister of Ghana, Hon. Yaw Osafo-Marfo, said that the potential of Africa’s insurance market is worth more than the 2017 figure of $64 billion.
He stated: “Individual companies are too small to shoulder the risks. Therefore at the end of the day you have most of the businesses going overseas. Ghana insurance industry, for instance, can only absorb three percent of oil and gas risk, the rest is taken overseas.
“We need to build relationships among African countries so that sub-regionally, the continent can take up what Ghana alone cannot do.
According to Akufo-Addo the insurance industry penetration rate as a measure of GDP in most African countries has remained in single digit, adding, ‘‘the rate of insurance as a percentage of GDP is about 3.2 percent in Kenya, 7.5 percent in Namibia, 14.5 percent in South Africa, and less than two percent in Ghana.’’
He said the sector has to graduate to a level where its contribution to GDP is in double digits. ‘‘That is when our catalystic role as a source of medium to long term funds will be felt,’’ he stated.