SADC insurance companies target mining opportunities
Gaborone – Insurance companies in Southern African are reportedly making inroads into the mining sector, a market with huge potential with respect to mineral reserves exploration and production.
This revelation was made during the Southern African Development Community Insurance Forum (SIF) workshop in Gaborone recently, which was aimed at promoting insurance and its role in mining and the environment.
SIF revealed that mining and resource exploitation are increasingly becoming the key drivers of economic growth in Africa.
It was revealed at the workshop that insurance had a critical role at the various stages of mining operations from exploration, mine design and development, production, mine closure and rehabilitation.
The forum said the mining sector has extreme risks and they require big insurance companies, which have the capacity to cover their risks.
Insurance companies have to constantly develop and retain skilled staff in order to be competitive in the globalised world, the insurance forum said.
SIF is an inclusive body that caters for the various needs of the whole spectrum of insurance industry players from regulators to loss adjusters in SADC.
The region is poised for an accelerated economic growth and development anchored on its vast natural resources and manpower base in order to alleviate poverty, which is prevalent.
Speaking at the workshop, SIF Chairman, Albert Nduna said the region had experienced flight of insurance skills as people sought greener pastures, hence there was need to nurture, develop and replenish the skill base continually.
“For insurers in the SADC region to be competitive in the globalised world, we need to develop and retain the skills needed in our economies which should match those obtaining in the advanced economies of the world.
“Regional development objects can only be achieved if a strong skills base including specialised skills are developed and retained to ensure superior performance and value addition,” he said.
Nduna said there was potential for the development of the insurance market in SADC, as most countries have been registering economic growth rates of above five percent in the last few years driven mainly by resource exploration.
“Insurance plays a critical role in the development of the regional economy by not only providing alternative risk transfer mechanisms and offering financial security, but through mobilising savings for national development and employment creation,” he said.
He said the economy could not flourish unless properties and processes were well defined and protected.
Nduna said regional development objects could only be achieved if a strong skills base including specialised skills were developed and retained to ensure superior performance and value addition.
There is a great potential for the development of SADC insurance market as most countries in the region have been registering economic growth rates above 5 percent in the last few years driven by the resource exploitation, Nduna said.
SADC Insurance Forum was formed following the African Insurance Organisation (AIO) meeting in Zimbabwe in 2011 by 30 insurance practitioners in the SADC region.
It was established to complement the efforts of other regional bodies on the African continent as AIO.
The broad objectives of SIF were to promote cooperation amongst SADC insurance and reinsurance players, foster business networking, deepen insurance penetration, facilitate inter-regional trade and the creation of a vibrant insurance industry in the region.
Nduna explained that the establishment of SIF was a response to a felt need that SADC is a unique African sub-region, and there was need to create a forum for insurance players with a regional focus.
He said the region was yearning for accelerated economic growth and development anchored on its vast natural resources and manpower base in order to alleviate poverty which is prevalent.
“The SADC region is also unique in that its people have come together so much over the centuries that there are strong bondages and common cultural perceptive and appreciation,” he said.
The creation of SIF was also expected to unlock various opportunities for the insurance industry in the SADC region, he added.
“This include the creation of increased capacity to manage regional risks, the establishment of more insurance pools, increasing insurance penetration ratios through structuring products for the rural poor, promoting micro-insurance, drought insurance, agriculture insurance, strengthening of regulation of the sector and establishing a regional insurance company,” said Nduna.
Statistics indicate that SADC has over 300 insurance companies, about 30 reinsurance companies, over 380 brokers and over 3 000 other insurance players, but SIF has registered few members.