Allianz Global Corporate & Specialty (AGCS) Africa Head of Engineering and Construction Insurance, Seelan Naidoo informed brokers, risk managers and insurance professionals in Nairobi, Kenya on Friday that the country needs modern risk management and risk transfer solutions to sustain economic growth. According to the World Bank, Kenya’s economy is projected to rise to 5.9% in 2016 and 6.1% in 2017. However, the country’s insurance penetration, which refers to premiums as a percentage of GDP, stands at over 3%, which means that it could have a significant coverage gap especially for infrastructure projects, which are essential for the continued economic growth.
Known as Risk Frontiers - East Africa, the purpose of the dialogue, which was held at the Windsor Golf Hotel & Country Club, was to encourage delegates to drive risk management as a discipline into the heart of organizations they work for as it is increasingly essential to the future success of growth within Africa. Insurance Regulatory Authority, College of Insurance Kenya and The East African Insurance Brokers Association also addressed participants.
“Kenya’s sustained economic growth depends on closing its vast infrastructure gap in power supplies, energy, roads, bridges, tunnels or other constructed facilities such as electrical capacity or components of water supplies, sewers, electrical grids, telecommunications, and so forth which needs innovative credit and investment solutions facilitated by public private partnerships through a clear policy and legal framework. But for these plans to work, they will require equally appropriate risk management and risk transfer solutions. Insurers and brokers need to work very closely with risk managers, regulators and stakeholders within the country to adequately assess current and future infrastructure development projects to ensure they are sufficiently protected,” said Naidoo.
Innovative and responsive insurance solutions can help. “There are numerous ways to close the protection gap to mitigate risks such as business interruption, cybercrime, fire and explosion, and political violence, terrorism to name a few. Both traditional insurance and the new generation of alternative risk transfer solutions can be used to find the right responses to an increasingly complex risk environment. In essence, this involves educating all stakeholders about these risks and advising them on relevant risk management and insurance solutions,” he advises.
The role of insurance and risks management is crucial for infrastructure projects. It gives government, the private sector and lenders the ability to diversify risk, reduce financial risk and ensure success. It also frees up capital, which can be optimally deployed into long-term projects. Overall, it ensures there is project continuity following major losses and major interruptions.
Allianz opened its operations in Kenya in 2015 and operates in 14 other countries including: South Africa, Benin, Burkina Faso, Cameroon, Central African Republic, Egypt, Ivory Coast, Ghana, Kenya, Madagascar, Mali, Morocco, Republic of Congo, Senegal, and Togo. Based in Johannesburg, AGCS Africa works with brokers, risk managers and other stakeholders on the continent to offer them insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business including Marine, Energy, Engineering, Financial Lines (including D&O), Liability, Mid-Corporate and Property insurance (including International Insurance Programs).