adminNAIROBI. — Sub-Saharan countries should exploit life insurance savings for current and capital expenditures, a new research on insurance markets in the region proposes. This the research says can be achieved through policies that encourage development of suitable local investments for life insurers. Titled “Life insurance markets in sub-Saharan Africa: Capturing the benefits for economic development” it advocates for policies that will attract life insurance policy holders to government bonds.
“Life insurers should come up with innovative insurance products that match people’s life goals so as to encourage their uptake,” said Judith Tyson, a research fellow — International Finance with Overseas Development Institute, and the author of the research.
The report says this would encourage life insurers to invest domestic savings within the host economy and deepen the financial markets. It says, to attract life insurance funds, there must be protection of government debt against high inflation and low returns so that it remains attractive to investors.
The report further suggests that government debt should be extended beyond the typical ten-year period to a maximum of 20 years. This, it says, is because life insurers’ assets and liability maturities are ideally matched. Tyson said Kenya’s young population is likely to take life insurance products to secure their families.
A World Bank Economist Jane Kiringai said insurers must raise the level of trust and carry out financial literacy. — Star.
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