A plan to promote more insurance uptake towards boosting insurance penetration in East Africa is imminent.
This is after the East African insurance supervisors agreed to jointly promote the development of cross-border insurance products and services.
Relative to established insurance markets in emerging countries, East Africa’s insurance market is at an early stage of development, according to a report by accountancy firm Deloitte.
Total insurance penetration stood at around 1.2 per cent across the region as of 2022, with the approach expected to push up the rate.
The agreement was reached on Friday, during the 7th special meeting of the Executive Committee (ExCo) of the East African Insurers Supervisors Association (EAISA) in Eldoret.
The members of the meeting also agreed to coordinate joint innovation initiatives relating to insurance development in member states.
Nevertheless, they also agreed to employ a joint approach in supervising systemically important insurance groups, monitor cross border industry stability and coordinate the establishment of insurance supervisory colleges.
Speaking on behalf of all the EAISA members, the Exco Chairman Alhaj Lubega, also Uganda’s Insurance Regulatory Authority CEO, noted the importance of coordinated regional initiatives, relating to research and development for effective policy development and implementation.
“EAISA is committed to building capacity across the member countries, as we seek to implement industry integration initiatives,” he said.
Also during the meeting, the supervisors adopted the first EAISA 2024/2025 – 2028/2029 Strategic Plan.
This means the regional insurance landscape is headed for major changes, as member countries now have to harmonize their legal and regulatory frameworks to provide a unified foundation that supports cross-border insurance operations by September 2025.
The members also have up to June 2025 to develop and adopt risk management and solvency standards to ensure insurers across the region maintain adequate financial reserves to cover potential risks and solvency requirements.
The plan is drawn along five thematic areas namely; insurance industry stability, insurance market development and innovation, consumer protection, institutional sustainability and cooperation, collaboration, and industry integration.
It has identified 11 key result areas that include claims handling and settlement, fair pricing practices, innovation hub establishment, product diversification, insurance inclusion, market expansion, crisis management, stress testing and market surveillance.
The plan envisages the development and adoption of regional frameworks for information exchange sharing and data standardization, group-wide risk assessment and cross-border supervision framework.
It also puts in motion plans to develop and adopt regional frameworks for financial literacy, risk-based supervision, certification for insurance professionals and actuaries, and market conduct and insurance claims guidelines.
The Meeting was hosted by the Insurance Regulatory Authority, Kenya and it came at a time when the EAC insurance markets are addressing issues related with market volatility, climate change risks, cyber risks, and geopolitical developments.
Further, frontier risks continue to disrupt supply chains and pose new challenges to existing policy, regulatory and supervisory frameworks.
