Kigali, 12 February 2018
Good morning and welcome to our country and if you will, our continent.
I am happy to have the opportunity to welcome you to Kigali for your 42nd General Assembly.
I thank all of you for making the journey, and I also thank the Federation for choosing to convene this meeting in Rwanda.
We invite you to feel at home and experience what our country has to offer during your stay.
Services are the fastest-growing segment of the global economy, already accounting for 70 per cent of output, and 60 per cent of employment, according to the World Bank.
Insurance services are an important part of that picture. But insurance does much more than compensate for misfortune.
The more advanced an economy, the greater the size, diversity, and efficiency of its insurance market.
Indeed, it is fair to say that insurance underpins prosperity and innovation.
Insurance products allow investors and entrepreneurs to take risks. In the United States around one-third of corporate debt is financed by insurers.
Insurance also facilitates the growth of trust over long distances. Without it, cross-border trade would grind to a halt.
As insurance companies invest customer premiums, they mobilise savings toward domestic investment, increasing the size of feasible projects in the national economy.
The very nature of the insurance business requires firms to take a longer-term perspective in their lending than commercial banks are able to do.
This is critical for the structural transformation of African economies.
Moreover, by giving a price to various forms of risk, insurance helps us to detect hidden danger and plan accordingly.
This means fewer deaths in fires and floods, safer roads and buildings, and less crime.
So, where does Africa stand?
One out of every six people on the planet is an African, nearly 17 per cent of the population. Yet Africa generates only 1.5 per cent of global insurance contracts, around 75 billion dollars, as of a few years ago.
Around three-quarters of that, comes from South Africa. The rest of the continent combined, accounts for less than one-half of one percent of the world market.
I think this has to change and you are the ones to change it.
The annual revenue of each of the top fifteen international insurance conglomerates has generally exceeded the total value of Africa’s insurance market.
As a result, insurance penetration in Africa, as a percentage of gross domestic product, is several times lower than in other emerging and developed economies.
Finally, banks and capital markets everywhere, including in Africa, have moved quickly to integrate new technologies.
This has greatly expanded access to financial services, especially in the informal sector. But insurance has been slower to adopt these innovations and it is important to catch up.
So, we have a long way to go. But there are two pieces of good news.
First, while these statistics may be unattractive, there is clearly a huge opportunity for future growth particularly as Africa’s middle class expands, and expands faster then anywhere else.
Africa’s national insurance companies, represented by all of you here, will be the drivers of that expansion as well as the natural partners for international firms looking to enter our market.
We should work closely with others, but that does not mean African insurers should take a subordinate role.
Second, the barriers hindering the growth and scale of trade in Africa are about to get smaller.
The agreement on the Continental Free Trade Area will be signed in Kigali next month at an Extraordinary Summit of the African Union.
This is a historic pact, which has been nearly 40 years in the making and it represents a major advance for African integration and unity.
Part of the Continental Free Trade Area is a Protocol on Trade in Services, and that includes the insurance sector.
The progressive liberalisation we expect in the years ahead will mean new opportunities for African firms to compete and cooperate across borders, and build continental reach.
I note that this is a very Pan-African group, with delegates from at least 32 African countries, as we witnessed earlier, not to mention more than a dozen countries beyond our shores, whose presence we also greatly appreciate.
I therefore want to ask for your active support, throughout the ratification and implementation process. There is a lot of hard work on the road ahead and credibility with the private sector is very essential.
We will need to harmonise our regulations and fully implement the Continental Free Trade Area in order to get the economic benefits, which our people expect, and even deserve.
That will require cooperation and commitment from government, civil society, and the private sector. Every stakeholder has a critical role to play.
Let me end this by welcoming you, and also wish you productive deliberations in the days ahead and hope you will enjoy your stay
Thank you very much for your kind attention.