What growth and profitability depended on your pricing policy?
The African non-life insurance market is a case in point.
Everyone agrees that Africa is virtually absent from the world map of non-life insurance and that the African market is the world’s largest reserve of growth potential. This is a first paradox for this continent, which saw the birth of one of the oldest forms of financial solidarity (and insurance) among the Phoenicians.
All indicators point in the same direction: from insurance penetration rates on the continent (on average half that of the rest of the world) to economic development generating a rapid growth in insurance needs. Given the crucial function of insurance as an enabler of economic development, every new asset or person covered for any additional risk is good news for the continent. This trend is so strong that the COVID crisis will not fundamentally change it and will, at worst, only delay it by a few months or years.
1. INCREASING TECHNICAL PRESSURE ON INSURERS IN THE AFRICAN MARKET
Every insurer on the African continent must be part of this growth, especially as they are under pressure from all sides.
The main pressures on the non-life insurer come mainly from the various technological, regulatory, environmental and behavioural changes that our profession has to face in a particularly «brutal» momentum.
2. TOWARDS A COMPLETE TRANSFORMATION OF PRICING
In a recent article entitled «The post-Covid-19 pricing imperative for P&C insurers», McKinsey & Company illustrated in the following table (the «McKinsey Pricing Framework») the implementation of a dedicated process for non-life insurers to achieve pricing excellence:
These recommendations, which are truly universal, also apply to the African continent, provided that they take into account the specificities of local markets.
In the second part of this article, you will find:
- 5 ways to improve your pricing strategy in Africa ;
- The two major enablers, key elements for Africa ;
- The top 4 steps of the pricing strategy to prepare you for sustainable growth.