Cynthia Ezekwe
The West African Insurance Companies Association (WAICA) has highlighted the urgent need for harmonisation of insurance regulation and education across the region, underscoring the critical role of collaboration and cooperation in establishing a robust, forward-thinking, and dynamic insurance market that can benefit all stakeholders and contribute to the region’s economic growth.
Speaking at the recently held annual conference of the West African Insurance Companies Association in Banjul, Gambia, Ogadi Onwuaduegbo, regional director for Anglophone West Africa at Continental Reinsurance, voiced his disenchantment with the lacklustre response of insurers to harmonisation initiatives.
Onwuaduegbo lamented the lack of enthusiasm and commitment among insurers to embrace a unified approach, urging them to recognise the potential benefits of a harmonised insurance market for the entire African continent
“The first question people ask is: ‘what’s in it for me?’ The question really should be ‘what benefits can we have by integrating and harmonising our efforts? The sector needs to think beyond its own immediate interests and then it might reap far greater rewards,’’ Onwuaduegbo stated.
According to Samson Omale, an industry expert, Africa’s insurance market remains highly fragmented, with each country operating under diverse regulatory environments, standards, and practices. This fragmentation, Omale argued, acts as a significant obstacle for insurers seeking to expand their businesses across the continent, as the varying requirements for reporting, capital reserves, and other regulatory burdens force executives to navigate a complex maze of rules and regulations.
Omale, in his keynote speech on “Building a Common Insurance Market in West Africa: Challenges and Prospects”, articulated the importance of collaboration in harnessing the full potential of the insurance industry to drive economic growth, asserting that while insurance plays a crucial role in any nation’s economy, its true potential can only be realised when markets come together and leverage the powerful synergies of such collective effort.
Dwelling on the impediments to harmonisation, Omale pointed to the presence of numerous regional integration arrangements within the same region as a major factor, leading to conflicting goals and policies. He also highlighted a number of additional challenges, including the costs associated with harmonisation, market volatility, inadequate technical expertise, slow information exchange, lack of effective policy implementation structures, minimal grassroots engagement, and the potential for resistance to the proposed changes.
“The insurance industry is the bedrock of most economic development in the industrialised world and yet this remains untapped in Africa. We have the numbers. We have the resources and we have the market. What is holding us back is a lack of synergy; collaboration and integration that create a common large and more profitable market for the good of the whole region,” he said.
With an integrated insurance regulatory framework, Omale explained, regulators and market players will have a critical reference point for designing business conduct rules and risk-based capital adequacy requirements that are regionally consistent. This will promote greater cohesion and efficiency in the insurance sector across the African continent.
In a call to action, Omale urged the WAICA to move beyond mere rhetoric and lay out a clear roadmap for the harmonisation process.
Building upon the discussion of harmonisation, Rotimi Fashola, the vice chairman of West African Insurance Institute (WAII) Gambia, who was represented by Bowen John, the institute’s director-general and head of mission, drew attention to the example of the CIMA zone, where Institut International d’Assurance (IIA) in Yaounde, Cameroon has successfully provided insurance education for all 14 countries.
Fashola enumerated several advantages of harmonising insurance education across the subregion, including: the promotion of professionalism and expertise in the insurance sector, through the establishment of consistent educational and training standards; fostering regional integration and cooperation among insurance practitioners and regulatory authorities; enhancing the mobility of insurance professionals within the subregion; and supporting sustainable development and economic growth in West Africa, among other benefits.
While recognising the potential benefits of harmonisation, Fashola acknowledged several significant hurdles in the Anglophone West African region’s quest for harmonisation, including: the lack of uniformity in educational systems and regulatory frameworks across West African countries; the difficulty in achieving a balance between national interests and sub-regional collaboration; and the political will required to overcome these obstacles, exemplified by the challenges posed by the Eco currency and conflicts between national and sub-regional interests.
To advance harmonisation among member countries, Fashola advised WAICA to cultivate broad agreement among a diverse range of stakeholders, such as governments, regulatory bodies, educational institutions, and industry associations; identify and resolve conflicting interests, priorities, and regulatory environments that may impede progress towards harmonised educational standards and practices in the insurance sector, slowing down negotiations and decision-making processes; and pursue additional methods for speeding up harmonisation.
