While risk remains the biggest deterrent to investment in Africa, AfriNet's investments in 11 African countries and correspondent relationships in 20 others have taught it some critical lessons about managing risk on the continent.
Having a broker who is able to develop a comprehensive risk policy providing predictable and guaranteed payouts provides clients with peace of mind. This level of expertise and advice is generally only available from the larger international groups, very few of whom are present in Africa.
"Not only is Alexander Forbes one of the few large international groups present in Africa, it is also headquartered in Africa," Duncan says.
"This makes Africa our business. We are not the African division of a global company; we are an African risk and benefits company.
"The best way to learn in Africa is from other people's mistakes. In Africa, you need to look at who has done well, who hasn't, and why." Since few African success stories are documented, it is necessary to talk with people who are successful in Africa to find out about pitfalls and opportunities.
"Based on AfriNet's own experience, as well as the track record of clients who have been successful on the continent, investors should aim to have a reasonable spread of investments in Africa."
This is infact the basic principle of insurance - spreading risk.
"For each, Zimbabwe, where most organisations have not been able to repatriate dividends, there are several other countries in Africa doing reasonably well. Spreading risk between them provides protection."
Furthermore, in most African countries, insurance regulations restrict the exporting of premiums to protect the local insurance industry. Duncan points out that "in order to place insurance premiums outside the country, the central bank invariably requires evidence that the local market cannot underwrite the risk. If you can't prove this, then you can't place the risk abroad.
"A successful broker needs to ensure that local regulations are complied with before the client can be assisted to access insurance globally.
"Knowledge of the different regulations in the different markets in Africa is only gained by having a real presence in these markets and a history of successful underwriting in African markets."
Duncan believes that this is where you need a broker with a strong African network and a powerful resource base in South Africa.
Looking forward, Duncan is convinced that AfriNet will continue to grow its business by providing world class risk and benefits solutions tailored to African realities as its clients continue to expand into Africa."
