Sub-Saharan Africa
Ghana | Kenya | Malawi | Namibia | Rwanda | South Africa | Uganda | Zambia | Zimbabwe
Summary
The FSD Africa report on how insurance regulators in Sub-Sahara Africa are being affected by and responding to Covid-19 highlights that the main challenge for supervisors is to achieve and balance their mandates and objectives. Regulators in the region are also requiring insurance companies to digitalise and innovate their processes in order to comply with restrictions put in place to stop the spread of the virus.
Covid-19 has had a large impact on Sub-Saharan Africa. A blog was published on 'South Africa’s response to the Covid-19 pandemic,' by Sub-Saharan Africa regional coordinator Loraine van Deventer, on the early decision to implement a lockdown and the regulatory relief measures that the government took. Guest author Jeremy Gray from Cenfri contributed a piece on 'The role of insurers to get economies back to business,' focusing on how insurance can help recovery from the Covid-19 crisis.
The A2ii spoke at Cenfri's webinar on 'The impact of COVID-19 on the sustainability of African insurance markets' in June 2020, exploring the impact of Covid-19 on the insurance supervisor and the insurance sector, including the fact that while insurers had had to respond to the pandemic on multiple fronts.
Resources
Cenfri: The impact of COVID-19 on insurance markets in Sub-Saharan Africa (link)
- Cenfri has published a series of articles, notes and presentations that capture the experiences of insurance markets across the continent
Webinars
July 2020 - Understanding the impact of COVID-19 on insurers in Eastern and Southern Africa
Sub-Saharan Africa news
- February 2021 - How Covid-19 has reinforced the value of insurance.
"The COVID-19 pandemic has reinforced the value of insurance products among customers, Dr Matt Lilley, Africa CEO of the UK insurer Prudential, has said citing feedback from the insurer's agency force. In an interview with African Business Magazine, he said that the pandemic has had a significant economic impact, particularly for people in the informal economy, which is a much bigger proportion of the economy in Africa than any other part of the world." Click here for full article
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November 2020 - Africa’s insurance fails to deliver on COVID-19 (link)
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December 2020 - The Covid-19 crisis is accelerating the switch to digital channels in African countries (link)
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August 2020 - The Impact of COVID-19 on the Insurance Industry, the case of Ghana (link)
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19 May 2020 - African regulators diverge on approach to Covid-19 payouts
South African insurers will not be forced to pay out Covid-19 claims on business interruption (BI) policies where non-physical damage was not written into the policy, after the South African regulator took a stance that is in contrast with the view of the Kenyan regulator. The move comes as the regulator reported most South African insurers look set to withdraw
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14 April 2020 - ODI working papers - Financing the coronavirus response in sub-saharan Africa
- 20 Apr 2020 - Tailored regulations needed for the continent's different insurance markets
- 13 Apr 2020 - Sub-Saharan Africa: Region faces recession for first time in 25 years
- 7 Apr 2020 - The African Risk Capacity (ARC), a parametric sovereign disaster risk insurer for African nations, is planning to add coronavirus protection to its planned outbreaks and epidemics parametric insurance product, which it aims to have available from 2021.
By Country
Ghana
October 2020 - Impact of COVID-19 on the insurance sector – Ghana
Kenya
Aug 2021 - Insurers ordered to stop selling COVID-19 side effect covers
19 Mar 2020 - In Kenya, after initial reports that some health policies - which typically exclude pandemics - would not cover coronavirus-related medical costs, the government’s Insurance Regulatory Authority has stepped in to ensure payments will be made. (Microinsurance Network)
15 Mar 2020 - blog from FSD Kenya
Government’s actions so far
- The Ministry of Health’s initial communication confirming the first case and subsequent information on identifying, quarantining, and testing those in contact.
- The Competition Authority of Kenya (CAK) press release with a cautionary notice on illegal price increases and hoarding that could “attract a penalty of 10% of the respective turnover”.
- The Insurance Regulatory Authority (IRA) engagement with the insurance industry to assure the public that the “insurance companies will continue to provide their services to policyholders affected or infected by the virus”.
- The President’s decision to institute new containment and treatment protocols including appeals to the financial sector to encourage the use of digital finance.
Concerns from the FSD Kenya team:
We are also worried for the majority of Kenyans without stable incomes and are most likely to feel the economic impact of this pandemic. These include micro, small and medium enterprises, casual labourers who are paid daily based on need, salaried staff who may be laid off or sent home on leave without pay, and dependents who rely on the benevolent support from their social networks.
How could Kenya’s financial sector live up to its own social contract during these challenging times?
- In addition to the fees already reduced from some payment service providers, could the government consider a temporary removal of the 20% tax on digital payment transactions to encourage the switch from cash to digital? Could the government reduce digital economy taxes to boost e-commerce and remote delivery of goods and services?
- Could more financial service providers reduce costs to ease the burden on both merchants and consumers and encourage the switch to digital and remote payments and banking services? (Learn how switching to digital already saves money in our Cost of Banking report).
- Could the Ministry of Labour use its communication channels with the older population through Inua Jamii to provide this higher-risk group specialised guidance on prevention and treatment?
- Could credit providers consider temporary suspensions of interest, repayment delays or rescheduling in line with the needs of businesses and individuals considering downturns?
- Could credit providers provide emergency liquidity facilities for sectors (like tourism) that are more likely to be impacted to help them manage this crisis?
- How can healthcare providers and transporters embed financial solutions to enable vulnerable populations to access care?
- How could the financial sector provide financing to help key sectors operate in this new environment such as schools needing to adopt on-line platforms or businesses needing to develop delivery capability?
- How can insurance providers and others help the vulnerable manage risks including farmers who need to be planting this season with the onset of the rains?
- Other countries have made policy decision to ease credit market including Italy’s decisions to suspend mortgage payments and the US decision to reduce interest rates. What steps could Kenya take to help enable the financial sector provide liquidity and risk solutions such as those outlined above?
- How can informal financial mechanisms such as chamas and harambees leverage digital tools and payments to continue
13 Apr 2020 - Regulator guides insurers on how to treat insurance premiums & claims during pandemic
October 2020 - Impact of COVID-19 on the insurance sector – Malawi
Rwanda
November 2020 - The impact of COVID-19 on the Rwandan insurance sector
Responses updated as of 30 April 2020
FSCA COVID-19 Industry Communication
- As part of the Financial Sector Conduct Authority’s (FSCA) efforts to reduce the impact of the COVID-19 pandemic on financial customers, regulated entities and the South African economy, the Authority has released various communication to provide guidance for customers and Financial Services Providers during this time.
13 Apr - Association says life industry able to weather COVID-19 turmoil
6 Apr - Regulator urges consumers to utilise credit life insurance for COVID-19 relief
December 2020 - Opportunities and challenges to innovation in the Ugandan insurance market
11 May - Insurance regulator issues pandemic-related guidelines
October 2020 - Impact of COVID-19 on the insurance sector – Zimbabwe
13 Apr 2020 - Regulator gives policyholders choice of paying insurance premiums in foreign currencies
