Statistics from Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has revealed that Botswana has an insurance penetration rate of a measly 3.2%. The Managing Director of Liberty Life Botswana Lulu Rasebotsa disclosed during the company’s fourth annual insurance and business breakfast seminar in Gaborone on Wednesday. She said last year close to 30 000 people died in Botswana and out of that number less than 550 of them had insurance cover.
Rasebotsa, who has been at the helm of the company since 2011, said NBFIRA has attributed the low penetration rate to an untapped insurance market, lack of innovative and differentiated products and customer service delivery. Rasebotsa - a BSc (hons) in Maths & Statistics graduate from the University of Kent - said another thing which has negatively contributed to Batswana shunning insurance policies is limited consumer education. To ensure that they address the concerns raised by the regulatory authority, Rasebotsa announced that Liberty Life is planning to partner with government and the regulator to grow market penetration.
This they will do through launching pioneering financial literacy programmes and initiatives that are focused particularly around the youth, she said.She said the reasons they will focus on the youth is that they are a growing population and the high youth unemployment which she said poses a challenge for Botswana and the rest of the developed world. “We are listening to the country’s social development needs and responding by focusing on financial inclusion and financial literacy,” she said, adding that they believe the youth are the future engines that will drive the growth of the country.
The annual seminar, which forms part of Liberty Life’s knowledge sharing initiatives, was also informed that the insurance company which is the fourth in Botswana in terms of profits will be launching youth and women development programmes that will align with the strategic social development agenda of Botswana. To tap on the growing African economies which are forecast to grow on average 5 per cent, Liberty Group Arrangements Chief Executive Officer Sandile Hlope announced that they have a refreshed strategy which is called Strategy 2020.
According to Hlope, the strategy will focus on customer centricity which he said will drive execution of Liberty Life’s vision to become the trusted leader in insurance and investments in Africa and other chosen markets. Liberty, which has a presence in 16 countries in accordance with Strategy 2020, will position itself for new growth and expansion on the African continent and this will be done through acquisitions, said Hlope, who is a chartered accountant by profession. “We see the continent as the next region to emerge as a global economic powerhouse,” said Hlope, adding that they are encouraged by the socio-political changes in Africa and the stabilisation of most democracies over the past decades.
“The main growth corridors in Africa are charging ahead whether the oil price is low or not, or there are local issues like insurgency, the theme of growth remains,” said the optimist Hlope.
He said the African continent is currently the second largest and most populous in the world projected to more than double to 2.4 billion people by 2050 and this, according to Hlope, is an opportune time for Liberty Group to have long-term plan to realise those opportunities. “We need to get customers to buy into the concept of protecting their income and greatest assets and planning for the future,” he said.
Botswana, which is ranked among the fastest growing economies in the world, continues to remain a strategic market for Liberty and for the past five years their business has been growing.
Early this year Botswana Parliament passed the Insurance Industry Bill of 2014 whose aim is to modernise the regulation of the insurance industry which was under the Insurance Industry Act of 1987. Presenting the bill, Minister of Finance and Development Planning Kenneth Matambo reasoned that the new bill seeks to address inadequacies and to provide clarity and transparency in the regulatory process.
Commenting of the new law, Hlope said that it will likely lead to a higher demand for innovative products and services, increased consumer education and financial inclusion. He said they embrace the changes that are aimed at growing market penetration and improving the sustainability of the industry. “We are responding through pioneering initiatives and partnerships with government that speak to some of the social development needs of the country, particularly youth and women development and increased participation in the financial services industry,” he said.