Speaking at Africa Insurance and Reinsurance conference in Nairobi, Tanzania Insurance Regulatory Authority CEO Israel Kamuzora said the move will see reduction in the number of Insurance companies collapsing leaving customers counting huge loses.
Kamuzora says having a common insurance framework will also help the regulators easily supervise these companies to ensure that they follow the given standards.
“Practice has shown that when one company fails in one country, the other subsidiaries also collapse. And actually it is even worse, if the headquarter company is the one that fails. These are the companies you need to regulate jointly,” he pointed out.
He has called for the stakeholders from all the five member states to hold consultations on how to kick of the process of harmonizing some of the insurance regulations especially on minimum capital.
“Maybe the company has a branch in Nairobi, Dar salaam, Kigali and the other major towns in the region. Can you imagine how confusing it is when each subsidiary has to listen and follow different rules,” he argued.
Kamuzora added this kind of collaboration will also help the regulators share information on how to grow the sector by overcoming some of the common challenges.
Rising income levels and dramatic demographic shifts is leading to the emergence of distinct consumer segments that need to be served in fundamentally different ways.
“ Insurers must take a hard look at what really differentiates them from their competitors and position themselves to adapt and thrive in dynamic business climate where customer needs and business are balanced,” he challenged the insurance firms.
During Kenya’s budget presentation, Finance Cabinet Secretary Henry Rotich made a proposal that will see East African citizens allowed to own local insurance and brokerage companies to boost implementation of the Common Market Protocol that became effective in July 2010.