Press Office Feature : Stop photocopying insurance solutions that don’t fit Africa
|Posted:||08 Jul 2007|
Let’s not assume the perceived experts know what’s best for us here in Africa because some first world thinking doesn’t fit.
We should be questioning everything! What works? What doesn’t?
This is the view of Israel Muchena, head researcher for Hollard’s international expansion programme, who has been working in the industry throughout Africa for 15 years: “The offerings from re-insurers are mainly driven by Eurocentric experience, research and thinking.
Insurers in South Africa – and the whole African continent – spend most of their energy imitating European models on which we have become chronically dependent. The end result is an uncritical application of inappropriate products to a narrow group of people.
“In other words, we have tended to follow blindly when entrenched and experienced re-insurers pronounce a certain risk to be unacceptable, even though their judgement is based on first-world thinking and usually has no relevance in Africa."
"In spite of this, local underwriters mechanically tend to submit, believing ‘they must know what they’re talking about because, after all, they are the experts’.”
But he says the tide is about to turn. “Hollard has established offices with strong local partners in Mozambique, Namibia and Botswana and future collaborations are following in other African countries."
"We are critically examining everything we do on our continent in terms of Afrocentricity, determined to ensure both insurance products and methods of distribution work well in the African context.”
Muchena gives examples of ‘photocopying’ in addition to South Africa’s ‘independent thinking win’ with the success of SASRIA:
Snow damage on the equator: Insurance for snow damage on fire policies sold in equatorial Africa is only one example of thoughtless acceptance of Eurocentric risk cover which has become a habit to follow in Africa, without critical thought by local insurers or re-insurers.
Un-written contracts: Should written contracts be the only option in Africa where oral traditions are stronger? “I believe one of the innovative ways to become more Afrocentric is to explore alternatives and broaden possibilities. Technology makes recordings of call centre conversations a reality."
"Why can’t the whole contract be recorded in some form? What’s wrong with a paperless system that does not exclude people who don’t have a writing culture?” Muchena queries.
SASRIA - Independent thinking: South Africa’s insurance for riots, strikes and civil commotion, and formation of the SASRIA joint pool, is unique in the world. Muchena says America is now looking at the SASRIA model to find out how it works, with the possibility of transplanting it to the US – following 9/11.
“And SASRIA was created by South Africa because of isolation during the apartheid years. Motivated by the political environment, sanctions and the lack of support from international insurers, South Africa mobilised itself to create a pool which was totally relevant to the needs of the time. This is a perfect example of creating local solutions for local problems and not relying on others for answers.
“In the rest of Africa there hasn’t been an initiative like SASRIA - or it’s offshoot in Namibia, NASRIA. South Africa achieved this by massive cooperation,” says Muchena.
Elsewhere in Africa, where insurers are dependent on the offerings from the international re-insurance market in this regard, local insurers do not cover political risk.
“Yet SASRIA has been working well in South Africa for many, many years. The bottom line is that there are certain kinds of insurance issues in South Africa – and the whole of Africa – that are insoluble without massive cooperation as an industry … like our marvellously inventive and sustainable SASRIA.”
Muchena stresses that conversations need to begin. “The public relies on us to come up with solutions that work. That’s our job as insurers. We can’t throw our hands in the air and give up. What would have happened if the SASRIA motivators had viewed the prevailing situation as impossible?"
"We need to start having conversations about situations that are perceived as impossible. We need to start coming up with home-grown solutions, because nobody can do it better than we can if we put our minds to it with the determination to be independent, Afrocentric thinkers.”
Hollard Helps Africa Leapfrog
Muchena believes one of the most exciting contributions Hollard is making, by being pioneers in certain African countries in the field of financial services, is they are delivering insurance products which comply with the latest South African consumer protection regulations.
“The rest of Africa doesn’t yet have the luxury that we are fortunate to have in South Africa, to think about consumer protection. They understandably have other more pressing priorities."
"And the benefit to countries where we will be delivering consumer-centric products is that they won’t have to go through the expense and prolonged process that we have. What a saving of resources, time and energy! Hollard is enjoying the idea of helping these countries bypass that process entirely and simply arrive at consumer-centric awareness.
“Also, the fact that Live Ubuntu is one of Hollard’s values is another Afrocentric contribution, as partnerships with locals are forged. Live Ubuntu has created an unusually vibrant culture for Hollard in South Africa, and it is also a connecting factor for Hollardites as we interact in other African countries with locals there."
"It incorporates an attitude of sharing and supporting rather than dominating. It is definitely an Afrocentric concept and sets the tone for seeking out African insurance solutions that are as home grown as Ubuntu.”
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