Insurers Must Adapt to ‘Informal’ African Market
Tuesday, April 14, 2015
Insurance companies are struggling to gain a foothold in Africa, where populations tend to favour community insurance schemes called tontines. These are often informal agreements between trusted friends and family members. EurActiv France reports.
Insurance is overwhelmingly an issue for rich countries. This does not seem likely to change, as 80% of the world’s insurance policies are held by the richest 10% of the population.
“Insurance is quite a new thing in Africa”, said Claude Fischer-Herzog, Director of Confrontations Europe.
“For Africans, insurance remains an elitist product”, said Hermann Kouassi, Executive Director of the Economic and Business Club of the Diaspora (CEADI). “And the fear of fraud is very strong, and often justified,” he added.
Less Elitist alternatives
But insurance, and particularly micro-insurance, has an important role to play in the economic progress of the developing world.
Micro-insurance, which is a form of protection against threats to the lives and livelihoods of low-income people in developing countries, represents a potentially vast market in Africa.