In order to witness a significant growth in the premium collections, Indian reinsurers are likely to look at an expansion of their reinsurance business in the African regions soon. Federation of Afro-Asian Insurers and Reinsurers (FAIR) has initiated talks with the reinsurance companies and others from the country about the dramatic impact on insurance and reinsurance industry in the emerging sectors like gold and oil exploration in the African region.
“As Africa is now growing as a business hub, the changes in the contemporary trading environment are so far enormous, especially in sectors like gold, oil exploration. So we expect a dramatic impact on both insurance and reinsurance industry, particularly in our market. The Indian insurers spreading their wings in Africa may look at the expansion of their reinsurance businesses in these sectors,” said FAIR Secretary General Adel Mounir.
However, sources involved in the process said, “A number of players in insurance sector - insurers, reinsurers, insurance brokers and others having their presence in India - are looking at expanding their businesses to Africa.”
Comparing the data of premium contribution in Africa with other emerging economies, Mounir claimed that the premium contribution in insurance sector to the GDP is 2.8 per cent in Africa, while Europe has 6.8 per cent, America 7 per cent and Asia 5.5 per cent.
FAIR believes that the aspirants must have a focused approach as far as reinsurance business is concerned. “I hope that the National Insurance Academy (NIA) model needs to be followed in other Afro Asian countries too,” Mounir hinted at a seminar in India recently.
“Reinsurance segment is crossing the ball and hence I do feel that insurers from Asia and Africa can work together in this area,” he added.
Talking about the catastrophic pool which was launched by FAIR a couple of years ago, he said, “It is doing very well, but the Afro-Asian Insurance and Reinsurance industry’s position worldwide is placed much better. Afro - Asian insurance premium of around $1.3 trillion as in the end of 2014 contributes to 29 per cent of the world total premium which reached $4.7 trillion for the year.”
These significant developments have been achieved with the support and protection of the global reinsurance industry, which protects the capital of the primary insurer against large losses and which provides large capacity for high value complex risk.
As per the FAIR study, market in Europe has realised $1.7 trillion and emerging markets including latin America and Caribbean realised $1.88 trillion. “These significant developments have been achieved with the support and protection of the global reinsurance industry, which protects the capital of the primary insurer against large losses and provides large capacity for high-value complex risks,” he said, adding that it is quite encouraging to see three Afro-Asian countries among the top 10 markets and the countries include Japan, China and South Korea.