Wednesday, September 28, 2022

Southern African insurance companies moving into mining cover

Southern African insurance companies are now making inroads into the mining sector as Africa mining sector remains a market with huge potential with respect to mineral reserves exploration and production.

This revelation was made during the Southern African Development Community Insurance Forum (SIF) workshop on Wednesday which was aimed at promoting insurance and its role in mining and the environment.

According to SIF, mining and resource exploitation are increasingly becoming the key drivers of economic growth in Africa. The regional workshop revealed that insurance had a critical role at the various stages of mining operations from exploration, mine design and development, production, mine closure and rehabilitation.

In an interview, Dziki Nganunu, the managing director at Botswana Insurance Company (BIC), said all groups of insurance, particularly those related to mining activities are expected to grow as the mining sector is poised for growth.

Nganunu said the mining sector has extreme risks and they require big insurance companies, which have the capacity to cover their risks. He said the risks and complexities in the mining sector are extreme and complex.

Over the years, the mining companies in Africa have been contracting oversees companies to insure them because African insurance companies do not have the capacity.

“As a region we have to collaborate to develop stronger insurance companies that have the capacity to insure the mining companies in the region,” said Nganunu.

On the same note, the deputy CEO at Non bank financial institutions regulatory Authority (NBFIRA), Dr Hira Sadhak, encouraged insurers and brokers to position themselves at right places as the world looks at Africa.

Sadhak urged insurers to find ways to access the global market as the local market is small. He added that as Africa is a resource based region, insurance companies should penetrate into that sector.

The African continent is home to around 30 percent of the world’s total mineral reserves. It holds 42 percent of the world’s bauxite, 38 percent of uranium, 42 percent of gold, 88 percent of diamonds, 44 percent of chromite, 82 percent of manganese, 95 percent of vanadium, 55 percent of cobalt and 73 percent of platinum.

SIF’s main objective is to create a platform for co-operation and formulation of common strategies towards the development of the insurance and reinsurance industry in the Southern African Development Community region.

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