Sub-Saharan Africa has opportunities for growth in the corporate and industrial insurance market but the region needs to increase its insurance penetration for future economic development, according to Allianz Global Corporate & Specialty (AGCS).
The firm argued the industry was currently dominated by developed markets. Citing figures from a KPMG report, G7 countries alone account for almost 65% of global insurance premiums, but they only cover just over 10% of the world's population.
However, total premiums in Africa for both life and non-life sectors amounted to $71.9bn (£51.5bn) in 2012. The figure represents a penetration rate of 3.65%. This is "well below" the global average of 6.5%, but above the average for emerging markets of 2.65%.
AGCS added that the region's premium was predicted to grow by 4.5%-5% for 2016/17, according to the Regional Economic Outlook International Monetary Fund.
But Delphine Maïdou, CEO in Africa at AGCS, warned that insurance needed to keep pace with investment and economic development.
Speaking at a risk management conference in London, she said: "Sub-Saharan Africa's continued growth depends on closing its vast infrastructure and skills gap, which needs innovative credit and investment solutions facilitated by public-private partnerships through a clear policy and legal framework.
"But for these solutions to work, they will require equally appropriate risk management and risk transfer solutions, which essentially means increasing insurance penetration."
Maïdou stated insurers needed to bring "innovative and agile solutions" to help businesses mitigate a range of business risks such as business interruption, fire and explosion and political risks.
Solutions include educating businesses, advising them on relevant risks management measures and ensuring these approaches are accessible in local markets.
"It is also critical for all players in the industry to do their homework about the regulatory and legal aspects of insurance within each country so they devise relevant and fully compliant solutions," she added.