Deloitte releases the East Africa Insurance Outlook Report 2019/2020 has been saved
Deloitte releases the East Africa Insurance Outlook Report 2019/2020
30 September 2019 — Deloitte has today released the East Africa Insurance Outlook Report 2019/2020.
The report takes a deep dive into the opportunities that insurers in the region are yet to fully explore. In the digital era, insurers have begun to explore the Internet of Things (IoT) and big data for more behavioural and contextual detail about their customers’ risk. On the other hand, insurance customers are gaining more insight about their own risk by use of wearables and other connected devices.
Commenting on the Report, Deloitte East Africa Insurance Industry Leader Rebecca Kariru-Muruki noted, “The first insurers who capitalise on the opportunities that digitisation and automation offer, will most likely be the biggest beneficiaries. It is up to insurers to start small without fearing to fail and make iterative changes to their business as usual approaches.”
To realize harmonization of financial laws and regulations the East Africa Community (EAC) Secretariat embarked on having in place the EAC Insurance Policy. The policy envisions a world class integrated insurance sector within the EAC and its mission towards an integrated, safe, stable and inclusive insurance sector within the EAC.
The report also provides a high-level overview of the macroeconomic environment, and International Financial Reporting Standard (IFRS) changes that need to be given priority as insurers set their agendas in the short to medium term.
It is important that companies understand the impact that IFRS 9 has, both current and future. This will enable them to develop appropriate models for their customer debtors, and therefore develop plans to enable them to lower their credit risk in the future. Insurance companies also need to have a better understanding of the impact that the IFRS 17 will have on their businesses and how they could use this as an opportunity to extract value from complying with the standard.
Insurers in the region have experienced better times than their financial performance in the recent years. With forces of competition and declining margins increasing, insurers need to look at ways of remaining relevant in the competitive scene while improving their operational efficiencies using technology.
It is estimated that 25% of insurance industry income in Kenya is fraudulently claimed. It is of key concern that insurers come up with ways of early detection and prevention of fraud in order to prevent the large amounts of losses.
Insurance companies should consider sharing information with each other and with regulators using blockchain technology. The shared information will be useful even in fraud detection since companies can detect fraud patterns from the shared data. In addition to that, insurers could make use of artificial intelligence to make sense of the data obtained and analyse the data to generate value adding results.