Africa, Middle East: volatile insurance markets
Click to download the magazine |
In fact, it is the development sustainability of these regions which is at stake. Africa and the Middle East are by no means standing for homogeneous zones and this impacts insurance. There is no way to make any comparison between South Africa, the number one insurance market in Africa and Morocco, the number two market on the same continent. And likewise, for the Middle East when it comes to comparing the United Arab Emirates with Yemen, for example.
The risks pertaining to the fragmentation of insurance markets are bigger than ever before. Such gaps may be noted among different sets, among markets of the same set or sub-set, gaps within the same market with some companies standing as antipodes to one another.
In this fragmented and volatile environment, it becomes hard to conceal the frailness of the markets. The good resilience put up at the local level by the insurance industry is not good enough to offset the long-neglected shortcomings.
In order to survive in a context of permanent crisis aggravated by the new challenges created by the digital revolution, a new policy has become a necessity. It is up to the supervisory authorities to ensure that market standards are complied with. It is incumbent upon the regulator to set both prudential and technical requirements, to consolidate stakeholders’ obligations and protect policyholders. Unless stringent measures are taken, there shall be neither cleanup, nor good practices, nor growth.