A Sadc Insurance Forum (SIF) has been launched to help create regional insurance institutions that stand on par with those in developed countries.
Speaking at the launch of the forum last week, interim chairman of the organisation's executive, Zimre CEO Albert Nduna, said that SIF would promote cooperation among Sadc insurance and reinsurance players, foster business networking, deepen insurance penetration, facilitate inter-regional trade and creating a vibrant insurance industry in the region.
"It's an acknowledged fact that Africa is the continent of the future. Africa needs, among other things, strong insurance institutions to facilitate its accelerated economic development," Nduna said.
The first special meeting of founding members of SIF was held on May 24 2011 in Victoria Falls on the sidelines of the Africa Insurance Organisation (AIO) conference. This resulted in the registration of SIF as a Trust on May 2 2012.
SIF is expected to take centre stage in nurturing and developing insurance skills in the Sadc region as it will cater for the various needs of the whole spectrum of insurance industry players, from regulators to loss adjusters and others.
Nduna said Sadc was a unique African sub-region, adding there was need to create a forum of insurance companies with a regional focus. SIF wanted to see the establishment of a family of insurance and reinsurance institutions that would position themselves to play a major role in the economic integration of the region.
He said the region was yearning for accelerated economic growth and development anchored on its vast natural resource base in order to alleviate poverty.
"Insurance plays a critical role in the economies of Sadc by not only providing alternative risk transfer mechanism and offering financial security, but in mobilising savings for national development, facilitating investment and employment creation," Nduna said.
He added that insurance encouraged private firms to invest and create wealth and also facilitate trade and commerce.
"The private sector cannot flourish unless an environment where investments in property and means of production are well defined and protected. lnsurance stabilises the financial situation of organisations," Nduna said.
He noted that South Africa had the most developed economy in Africa and the insurance industry there accounted for between 72% and 80% of the continent's premium of about US$35 to US$40 billion.
He said rough statistics indicated that there were more than 300 insurance companies in Sadc, 29 reinsurance companies, 386 brokers and more than 3 000 other players. SIF is expected to be initially headquartered in Harare.
Its establishment is also expected to unlock various opportunities for the insurance industry in Sadc.
This includes the creation of increased capacity to manage the regional risks, the establishment of more insurance pools, the possibility of establishing a regional reinsurance company, increasing insurance penetration ratios through designing products for the rural poor, promoting micro-finance, drought insurance, agricultural insurance and strengthening regulation of the sector.
"Opportunities also exist in strengthening information systems in order to facilitate operational efficiencies. There are also some opportunities to broaden distribution channels for insurance products," Nduna said.