NAIROBI, Nov. 17 (Xinhua) -- Insurance experts across Africa said Friday there has been an increase in demand for political and terrorism risk covers from local and foreign businesses operating in the continent in a move aimed at protecting their investments from associated loses.
The experts said one of the biggest triggers of political and terrorism insurance demand is elections, but more businesses are taking the covers even in periods when elections are not being held, an indication of growing awareness of the need for the risk products.
"There is definite demand for political and terrorism risk insurance in markets that we operate in across Africa," Catia Folgore, senior liability underwriter at global insurer Alliaz South Africa, said during the Risk Frontiers Africa 2017 conference being held in Nairobi.
Political and terrorism risk insurance are relatively new risk management tools in Africa which insurance experts say are yet to be fully appreciated across the business community.
Souvik Banarjea, the Managing Director of Continental Re in Kenya, said there is however a realization that the two key products are crucial not only in business continuity but also ensuring that investors are protected from financial loses.
"What we have been telling businesses across Africa is that the best time to get covered against political and terrorism risks is when they think they do not need the covers. Because things happen very fast and they may get hit and that will mean losses," said Banajea.
Benjamin Mugisha, senior underwriter at Nairobi-based Africa Trade Insurance (ATI) gave an example of Africa's largest wind power project, the 300MW (megawatt) Lake Turkana Wind Power in Kenya, which is now benefiting from government payout because a state agency has delayed in completing the transmission line which would have fed the wind power to the national grid.
"This was only possible because this company has a political risk cover which covered it against delays by the government to avail the power transmission infrastructure," he said.