Plans to Launch New Regional African Insurance Association

August 20 - Recognizing the need to pull together in order to advance industries and markets, the five member states of the East African common markets have announced plans to form an association that will operate at regional level.

Up until now, these member states have been operating their own insurance associations at country level.

"We have realized it is better if we come together as industry players in the EAC to address our challenges," said an insurance industry source.

One of the main issues to be addressed by the new association is that of cross border regulation in a common market setting.

Other issues that the association will focus on include a standardization of quality of services and the resolution of disputes among regional insurers.

"If a company, insurer, broker or agent is licensed in any EAC country, it should be free to set up and underwrite business in any other EAC member state without seeking a license anywhere else in the region," said the source. "However, this is not the case today."

Another key area to be addressed is that of forming a level playing field for all insurers in the region in a bid to increase penetration of insurance at a much higher level than current figures.

Kenya, for example, has the highest rate of penetration at 2.7% in the region, compared to South Africa's 15.97%. Uganda has a penetration rate of just 0.6%

"Although some countries in the region are better than others when it comes to insurance penetration levels, all EAC countries have not advanced compared to countries like South Africa and we face the same problems," said the source.