Regulation transforming Africa’s insurance landscape

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There are strong signs that Africa’s insurance industry is currently in a transformation phase, according to KPMG’s South African Insurance Survey 2015.

The report says the challenges faced by businesses today are fundamentally different to those of 20-30 years ago. “Current worldwide events highlight the growing need for political risk insurance globally.”

The survey found that regulatory and accounting changes have resulted in some of the transformations in the South African insurance sector.

Raimund Snyders, Mutual & Federal’s chief executive officer, told CNBC Africa that South Africa’s insurance industry was under pressure just like the rest of the world’s economy.

“The insurance industry in a developed insurance market grows with the economy, and it is unlikely that one will see the sector growing outside of the growth trend of the economy,” Snyders told CNBC Africa.

He added that, when the economy is under pressure, one way of remaining afloat is staying closer to the customers and being efficient.

The KPMG report also says the global risk landscape was marred by political conflict in both emerging and developed markets.

“Investing in these markets or other developing markets can offer great opportunities if you are able to effectively manage your exposure to the prevailing political risks,” according to the report.

Political risks, prevalent in emerging economies, presented opportunities for actors in this space. The underwriting of political risk insurance, locally and internationally, is a dynamic and growing business.