With an ageing population, the number of retired people is expected to exceed 200 million by 2020. There’s much need for more life, property & casualty insurance products. This is also opening a door for more investment opportunities between companies from China and the African continent.With the global financial crisis, insurers and reinsurers from around the world started to walk the walk alone.This is what players at this year’s Federation of Afro-Asian Insurers and Reinsurers conference in Beijing are trying to change."Asia makes up a large bulk of our international business.
But from now on, we are focusing more on opportunities in Africa and the Middle East. But this requires time."said Li Peiyu, chairman of China RE Group.In the past, foreign insurance firms seeking to enter China’s market have mostly set up joint ventures with Chinese partners. But it has been a struggle.According to China’s insurance regulator, the mainland’s top 4 insurers occupy a market share of up to 70 percent.China, given the size of the population and the low penetration rates, is a highly lucrative market for foreign insurers and reinsurers. But the dominance of local players has so far limited their expansion.
With the opening up of the country’s insurance market, foreign players expect a less bumpy road ahead.The 41-member African Reinsurance Corporation, or Africa Re, and other smaller players from the continent are eager to grasp the opportunities, but say hurdles have yet to be overcome, several factors have hindered stronger cooperation."One of the challenges is the size of the market. And you know insurance and reinsurance is about capital, it’s about capacity. Players on the continent are still small in terms of volumes of capital. So you cannot enter this kind of market easily with very small capacity."said Corneille Karekezi,Group MD & CEO of Africa RE."There also needs to be a lot of cooperation between the insurance industry in Kenya as well as the one in China. And there are many avenues for penetrating each others’ industries. For example the brokers. Insurance brokers or reinsurance brokers here can deal with insurance and reinsurance companies in Kenya."said Jadiah Mwarania, managing director of Kenya RE.At global auditing and advisory firm KPMG, experts believe the two markets are complementary.The saying "no risk no gain" also applies to the insurance business.With China’s huge consumption power, coupled with rising incomes, analysts here foresee a particularly strong investment potential in specialist insurance.
