East African countries are working on the harmonisation of policies to hasten the growth of the insurance industry, East African Insurance Supervisory Association (EAISA) Chairman Ibrahim Kaddunabbi has said.
He noted that the contribution of the insurance sector to the region’s Gross Domestic Product (GDP) was still low.
“Kenya as the most advanced still commands just below three per cent, with Uganda and Tanzania below one per cent,” Kaddunabbi said. “This is far below the recommended global average of six per cent - meaning that, as regulators, we’ll need to come up with favourable policies to spur sector growth.”
Mr Kaddunabbi, who is also the chief executive officer of Insurance Regulatory Authority of Uganda, was speaking in Nairobi at a training workshop for heads of regulatory agencies from Kenya, Uganda, Rwanda, Tanzania and Burundi at the weekend, hosted by ZEP-RE (PTA Reinsurance Company’s) training division, the ZEP-RE Academy.
ZEP-RE Chief Executive Hope Murera said time was right for the insurance regulators in the region to forge a common front and develop policies and laws that will make it easier for insurance companies to do business across borders.
“There needs to be clarity on the issue like the capital requirement for companies operating within the region. For instance, if a company is established in Kenya and has met all regulatory requirements including capital adequacy, and if it wishes to establish a subsidiary in any other East African countries, does such a company need to meet another capital requirement set for the host country? Ms Murera posed.
“These are some issue discussed at the regulators’ workshop that ZEP-RE academy hosted.” Kenya’s Insurance Regulatory Authority acting CEO Godfrey Kiptum said there were positive moves by individual States in policy formulation to boost insurance penetration.
He said Kenya is in the process of enacting policies that will help develop the micro-insurance sector. Already, the Microinsurance Regulations 2018 is in place, awaiting approval by the National Assembly.
“By putting our head together as regulators through such workshops, we’ll be able to share ideas and forge a common front in tackling emerging regulatory issues in the region as markets dynamics change,” Kiptum said.
Insurance businesses have experienced challenges ranging from low levels of penetration to lack of appreciation of insurance to fraud.