Violence ‘hindering growth of insurance sector’

Experts in the insurance and risk sector in Africa say risks and violence hinder the growth of the market at both micro and macro levels.

They said this at the Commercial Risk Africa’s annual West African conference which held at the Four Points by Sheraton Hotel, Victoria Island, Lagos, on Thursday.

In her presentation, Minoka Radhakrishnan, director at AXA Africa Specialty Risks, used a seven-pronged approach to buttress her point.

“Escalation of violence in northern Nigeria, for example, can affect economic activity including production and trade,” she said.

“This had led to minimal growth in a real gross domestic product (GDP), currency fluctuations, reduced export and fiscal revenues, reduced trade window and low investor confidence.

“These, among other macroeconomic factors affect political risk insurance and trade credit insurance.”

Genevieve Ahinful, underwriter at African Trade Insurance Agency (ATI); Olayinka Odutola, director-general and chief executive officer, Association of Enterprise Risk Management Professionals in Nigeria (AERMP); and Alex Boadi, chief executive officer at Let’s Move Africa, were some of the panelists.

Ahinful said in the light of risks across Africa, ATI provides political violence cover where there is a perceived need for it due to its developmental and commercial mandate.

Odutola noted that due to political violence and its accompanying risks, a lot of capital projects are abandoned resulting in infrastructural lags which plays out negatively on the local insurance market.

“Due to Nigeria’s political landscape, we record some of the highest number of abandoned projects in the world. This situation affects the ability of international insurance and risk companies to enter the Nigerian market as key players,” he said.