Ver Angola

Banking and Insurance

Insurance penetration rate remained below one percent of GDP in 2022

The penetration rate of the insurance sector in the national economy remained below 1 percent of Gross Domestic Product (GDP) in 2022, resulting from the low insurance culture and insufficiencies in the supervision of compulsory insurance, said an official source.

: Facebook Ministério das Finanças de Angola
Facebook Ministério das Finanças de Angola  

The current scenario of the insurance market in Angola was presented on Friday in Luanda by the Secretary of State for Finance and Treasury, Otoniel dos Santos, who pointed out the reduced culture of insurance and constraints in the performance of companies, as obstacles to the sector's action.

"The first is the low insurance culture. The less the citizen knows about the importance and benefits of insurance, the less appetite they have for subscribing to it. Citizens, families and companies need to be aware of the importance of insurance for themselves and for society in general," he argued.

According to the minister, who was speaking on Friday at the opening of the VIII Insurance Forum, held by the newspaper Expansão, the second constraint results from the actions of the insurance companies themselves.

"It is important that the victims can, in fact, trust the insurers and count on them for the timely settlement of claims when they occur," he noted, lamenting the existence of insurers who "evade" in fulfilling their obligations.

Insurers that refrain from doing so, "when there are no reasons to decline to settle a claim," he said, "have not contributed to improving the positive perception of insurance in society".

Otoniel dos Santos pointed out that the sector's penetration rate in the national economy "is still below the penetration levels of other countries in the southern region, where the average is already 3 percent of GDP."

To reverse the low rate of insurance penetration in Angola, Otoniel dos Santos urged the Angolan Insurance Regulation and Supervision Agency (ARSEG) to continue its efforts to ensure the promotion of the insurance culture in a regulatory environment "robust and capable of promoting competitiveness and stability in the sector".

The Secretary of State defended, in his speech, the need to continue with the process of assimilation and implementation of good corporate governance practices, "in order to promote more solidity, professionalism, reputation, reliability and credibility" to insurance companies operating in Angola.

Compulsory insurance, he recalled, is created to ensure that all those whose interests are harmed by others have a guarantee of effective reparation, without being dependent on the financial capacity of the person who caused it.

He also noted that ARSEG has catalogued 27 compulsory insurances, whose underwriting levels are quite low, with the exception of insurance associated with the oil and civil aviation sector.

"Regarding compulsory car insurance, for example, which is the most popular insurance, it is estimated that only 15 percent of vehicles have this insurance, which confirms the penetration that insurance has in our market," he stressed.

Otoniel dos Santos considered that Angola still has a long way to go in the field of compulsory insurance for accidents at work and occupational diseases, accidents at work in the construction sector, fire of buildings in horizontal property, fire of buildings and assets used in games of chance, financial leasing and others.

The need for effective supervision of compulsory insurance was also defended by the minister, who considered that, in this process, ARSEG has the fundamental role of mapping, regulating and supervising them.

"We therefore have a way to go to achieve a more ambitious insurance penetration rate, which will only be achieved if we invest heavily in financial literacy, as well as in innovation and the offer of increasingly inclusive products," he admitted.

The Secretary of State for Finance and Treasury also considered that insurance is an important element of the agenda for diversification of the economy on a whole scale, praising the actions underway to stimulate and boost agricultural insurance.

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