"Dear Delegates, Ladies and Gentlemen,
The pleasure is mine to address you on behalf of the African Insurance Organization and most especially to heartily welcome you all to the 24th African Reinsurance Forum holding here in Tunisia, a country with a commendable record of hospitality. This should explain why within the past seven years, this is the fourth major AIO event Tunisia is hosting.
I wish to express our recognition for the effort of the Local Organizing Committee, the Tunisian federation of Insurance Companies, FTUSA as well as Tunis Re for working so hard to make this event a success.
The constant solicitation of Tunisia for hosting our events and many others is also an indication of the dynamism of the Tunisian insurance market. According to a report published by Atlas Magazine, The Tunisian insurance market reported premiums worth 740 million USD in 2018, increasing by 6.7% compared to 2017.
To produce such encouraging results, the government of Tunisia and the insurance industry actors are working tirelessly towards the creation of enabling proper conditions, in a changing worldwide environment. They force our admiration and recognition for their accomplishments.
Ladies and Gentlemen,
The AIO’s goal for setting up the Reinsurance Forum is to encourage business exchange through bilateral contacts and discussions in line with the organization’s objective: Promoting inter-African cooperation and developing a healthy insurance and reinsurance industry in Africa.
Since the inception of the Reinsurance Forum, there has been a lot of business exchange among African industry professionals but there is still much room for further improvement.
This 24th Forum gives us another excellent opportunity to examine some of the challenges facing our industry in Africa. This year, the AIO Secretariat and the Local Organizing Committee have proposed that we address the New Regulatory Challenges.
The African operating environment is characterized by emerging economic challenges, social instability and political uncertainty. However, African reinsurance markets are offering great opportunities for diversification and growth for those taking a long-term perspective.
Yet, the unbalanced regulatory environment is one of the challenges that need to be tackled to allow long-term growth.
“The African Insurance Regulation Directory”, a publication of Africa Re makes us understand that comprehensive insurance regulation was absent in many African countries as recently as two decades ago. Today, however, in a sign of growing maturity, the International Association of Insurance Supervisors has over 21 African members representing 35 countries, including the 15 member countries of the Conférence Interafricaine des Marchés d’Assurances/ Inter African Conference of Insurance Markets (CIMA). Most African countries now have insurance legislation and regulation in place, but the extent of insurance regulation and supervision varies across the continent.
Whether it is driven by protectionism or a desire to develop local insurance markets, each country has its own rules and regulations on insurance, from compulsory covers to tariffs to mandatory local retentions.
The disparity in the conception and application of regulatory principles is in itself a very big challenge across many African countries understandably so because the end result of any regulation is to promote stable and secure insurance markets.
“The African Insurance Regulation Directory”, further states that “In general, Africa’s regulators share little information among themselves. Harmonization and improvements in cross-border trade could be brought about by implementing certain courses of action, such as a common approach to supervision, licensing and claims payments. Efforts toward creating the right conditions for healthy cross-border trade, and benefitting policyholders and the entire insurance industry could be made by improving supervision, insurance laws and regulations or application of existing laws and regulations”.
The need for a comprehensive regulatory environment is growing even more with the rise of natural catastrophes. According to the last Sigma report on Natural Catastrophes: “Total economic losses from natural catastrophes for 2017 and 2018 combined were USD 219 billion, the highest ever over a two-year period. We expect this trend to continue given ongoing urbanization, growth in concentration of assets in exposed areas, and, long-term climate change projections.”
The disparity in our regulations across Africa can be attributed to the fact that local know-how and skills transfer is made more difficult by the fronting of larger sized and specialist risks to international markets. However, it is through local reinsurers that we will explore new ways of ensuring that people and companies in Africa are adequately protected through innovative products and solutions that fit their needs.
To encourage industry consolidation, local regulations in some markets are pushing the strengthening of capital requirements in some markets. But it is not sufficient.
A recent KPMG report titled “Key regulatory challenges Facing the insurance industry in 2017” conducted by Americas FS Regulatory Center of Excellence states that “Along with other financial institutions, insurers face increasing regulatory risks and challenges. Regulators around the world continue their efforts to develop comparable frameworks across multiple jurisdictions for insurance conduct and supervision, while insurers themselves are working to implement a risk-based structure. Overall, there are several key themes that have emerged in this changing regulatory environment. Regulatory reporting and a focus on consumer-oriented governance are driving the insurance industry regulatory challenges. Cyber-attacks are frequently targeted at insurers, jeopardizing highly confidential personal data. And, InsurTech, evolved from FinTech, is introducing innovative approaches to using technology in marketing insurance products to consumers while developing new underwriting, claims, and distribution platforms. As insurance regulatory risk increases, management must demonstrate robust oversight, compliance, and risk management standards in an increasingly complex environment”.
We have the daunting task today, to examine the new regulatory challenges facing our insurance and reinsurance sector. I encourage all delegates present to make their skills and time available in order to come out with a blue print for our continent on how to navigate through these challenges.
The quality of speakers in this forum leaves me very confident that at the end of this event, we shall be on the right side of history as solution providers for the African insurance industry. What we therefore arrive at as resolutions should be able to move our industry some steps to the right direction.
I won’t end this speech without introducing to you the new General Secretary of the African Insurance Organization, Mr. Jean Baptiste Ntukamazina. This is his first official outing as Secretary General of the AIO.
Finally, our hosts have labored so hard to make our stay here quite memorable. Do not hesitate to savour Tunisia’s exotic touristic sites as contained in the excursion program such as the Ruins of Carthage and to Sidi Bou Said, the Bardo National Museum and Old Medina of Tunisia, the Kairouan and Sousse.
I wish you all very successful deliberations.
Thank you for your kind attention."