REPORT OF THE AIO FINANCE AND RISK MANAGEMENT SEMINAR WHICH HELD IN DOUALA FROM THE 14TH TO THE 16TH MARCH, 2010.
The African Insurance Organisation, AIO, organised a two-day capacity- building seminar on Finance and Risk Management at the Akwa Palace Hotel in Douala from the 15th to the 16th of March, 2010.
The seminar which was held under the theme, ‘The Global Financial Crisis: Challenges for the African Insurance Industry’ had 96 participants from 19 countries, mostly Chief Executive Officers, Finance Directors, Chief Finance Officers of insurance and reinsurance companies, Auditors and Insurance Supervisory Authorities.
The main objectives of the seminar were to consider the issues in the transition to International Financial Reporting Standards (IFRS) and how African countries could facilitate a seamless change, discuss the elements of Enterprise Risk Management and its role in managing uncertainties and related challenges that African insurers face as well as discuss options available to African insurers for optimizing cost in the wake of the global economic crisis.
The two-day capacity building seminar was declared open by Cameroon’s Minister of Finance, represented by the Director General of Treasury, Mr Ahmadou Sambo. He exhorted the seminar delegates to come up with sound recommendations which will help protect the African insurance industry from the effects of the global financial downturn, and help governments of African countries realise economic growth.
Other speakers at the opening ceremony of the seminar included the President of the African Insurance Organisation, Mr Israel Kamuzora and the Secretary General of the AIO, Ms Prisca Soares. Also present at the opening ceremony were Cameroon’s Commissioner for Insurance in the Ministry of Finance, Mr Albert Pamsy, the President of FANAF, Mr Protais Ayangma Amang and the President of the Association of Cameroon Insurers, Mr Martin Foncha.
Day one of the seminar was devoted to four key presentations by the guest speakers. During the first session, seminar delegates were drilled on International Reporting Standards by Mr Benoit Atangana Onana, Principal Partner, A.C.E. African Consulting Enterprise, Douala, Cameroon. Mr Alfons Van der Vyver, Senior Manager in KPMG’s Insurance specialist department, South Africa, did the second presentation on Transitions to IFRS: Issues for African insurance companies. The third presentation was on Options for Optimizing Cost in the wake of the global financial crisis by George Onekhena, Deputy Commissioner (Finance), National Insurance Commission, Nigeria. The last session was on Enterprise Risk Management, and this was handled by Mr Lotfi Elharddadi, Director, Ratings Analytical Financial Services Insurance, Standard & Poor’s, Paris, France.
Day two of the seminar was devoted to three break-out sessions, the first on International Financial Reporting Standards and Transitions to IFRS, the second on Cost Optimisation and the third on Enterprise Risk Management.
Recommendations
After brainstorming in the break-out sessions, the 96 seminar delegates went into a plenary session that was chaired by the AIO President, Mr Israel Kamuzora. After lengthy and spirited debate, the plenary adopted the following seven major recommendations:
A- OPTIONS FOR OPTIMIZING COST IN THE WAKE OF THE GLOBAL FINANCIAL CRISIS
1- Leading by example board and management should seek at all times to inculcate in their staff the cost optimisation philosophy
2- In order for insurance companies in Africa to optimize cost, they should employ tools such as activity-based costing, process re-engineering and continuous improvement.
B –ENTERPRISE RISK MANAGEMENT (ERM)
1 – It is high time the insurance industry in Africa adopted ERM framework including acquiring necessary resources for effective deployment.
2 – The culture of ERM needs to be imbibed by the entire organisation from the board down the line.
3 – The boards of insurance companies are required to establish effective risk management structures in their companies.
C –TRANSITION TO IFRS
1 - The contribution made by the present seminar is essential to the understanding of the importance of IFRS in Africa. Therefore it is recommended that the AIO, in its role of educating the insurance sector, should organise similar seminars for the sensitization and better understanding of the issue by African insurance entities.
2 – Since the insurance business is a global one, it needs to adopt global best practices. Therefore it is recommended that IFRS be adopted.