The total Insurance Premiums in Africa dropped from 72 billion US Dollars in 2013 to 69 billion US Dollars in 2014 according to the latest data from Africa Insurance Organization Survey dubbed Africa Insurance Barometer 2016.
Life Insurance accounted for about two thirds of the 2014 total Premiums with the remainder going to Non – Life Insurance. South Africa as always dominated the African Insurance Market with 71% share of the total Premiums.
However, insurance penetration accounted for only 2.8%of Africa Gross Domestic Product (GDP) with the exception of South Africa and Namibia where Insurance penetration levels have reached 14% and 7.3% respectively. Overall, the contributions of Insurance to GDP are still significantly lower than Global average of 6.2% in all other African Countries.
Experts believe that the Insurance Industry in Africa can only make meaningful contributions to the Global Insurance Market when they over –come the challenge of fragmentation which has led to weakness. The problem of fragmentation is evident in the numbers of Insurance companies in most African countries; many of them just fringe players.
Nigeria has 50 Insurance companies, Ghana has 46, and Kenya 47, Mozambique 48 and Liberia with a population of only 4 million have 31 Insurance companies and Uganda 29.
Experts are of the opinion, that there is urgent need for Insurance Firms in the continent merge operations within country and across borders, so that they can have large Insurance and Re – insurance companies with balance sheets that are better able to ensure lasting legacy and compete with the biggest and the best in the world.