Africa’s economies are expected to keep expanding in the long-term. Social and demographic changes, from the growing urban population to its expanding workforce, will continue to make Africa an attractive business destination.

This growth will drive increasing demand for benefits plans companies can use to protect their local and worldwide employees.

Governments like Nigeria have implemented legislation requiring all companies to offer mandatory standard pension and life cover to workers.

Unfortunately inadequate monitoring systems risk compromising the efficacy of these measures.

Many nations have developed employee benefits businesses offering the entire array of benefits, from pensions to health insurance, but they’re facing challenges to stimulate demand and improve people’s confidence in insurance providers.

But as multinationals increase their presence on the continent and companies bring their employee benefits consistent with global standards, the requirement for risk solutions is set to grow.

Coverage standards

Life and Disability coverage is often aligned to the fundamental standards defined in Workmen’s Compensation (WCA) and Group Personal Accident (GPA). An education process is required to highlight the shortcomings of a WCA or GPA gain structure, which only covers workers for events going on in the office or where cause is due to an accident.

Workers should consider the need for Death or Disability coverage too in case of events resulting from “all occurrences”, in the workplace or from work, and because of injury or illness. Furthermore, employers need to be careful when using a combination of benefits to replicate the lawful requirements of WCA, to be able to make certain that the replacement benefits satisfy all of the WCA obligations. For instance, using a GPA (24 hours coverage ) might offer additional coverage to workers and seem to fulfil the demands of the WCA. But, using GPA as a replacement benefit wouldn’t be adequate to pay the illness-related obligations included in the WCA.

Many insurance companies have yet to build benefits aside from Lump Sum Death and Disability. Typically Lump sum Disability is a collision advantage based on a scale relative to the workers injury. This is largely because of the insurers’ inability to pay monthly income to claimants and to a lack of expert claim assessors who will do regular follow ups on open claims procedures. Other benefits that could be in demand from multinationals include Spouses or dependents cover and Critical Illness. Even in cases when these benefits are offered, terms and conditions are of inferior quality.

Pension funds are usually provided for in Social Security Insurance (SSI) structures. Where SSI is in force, pensions are provided for by the private sector or from the authorities. In a few countries, such as Nigeria and lately Ghana, pensions are separated from the Insurance business and are provided for by independent administrators. They are further divided into custodians of the resources and asset managers. The supply of Pensions has fought to gain acceptance as workers haven’t seen actual returns due to poor acting investments or the unavailability of credible Investment choices.

The medical insurance market in Africa is expected to expand and shows positive signs of remarkable improvement. Not less than a decade ago if an employer wanted to buy comprehensive medical insurance for workers they would often self-insure the risk or find international solutions. Local Insurers were not able to provide medical insurance solutions and it was improbable reinsurers would encourage Health Insurance Plans. This has changed significantly and in countries like Kenya, Nigeria and Ghana, the medical insurance market is becoming a significant source of income for Insurance companies.

In the past decade numerous medical insurance schemes have initiated diverse outcomes. However while 46.8percent of SSA’s population live below the poverty line in comparison to a mere 1.7percent in the Middle East and North Africa region (World Bank), nearly all healthcare funding still comes from out-of-pocket payments. Barriers remain to the uptake of these schemes such as: lack of confidence in public health provision, higher unemployment rate and lack of affordability. The quality and availability of qualified physicians has been advancing.

What companies should look for is to get a health program which not only provides comprehensive and decent coverage but also guarantees access to a broad network of health providers. Unfortunately, this isn’t always available and companies are often left with no option but to evacuate their workers to countries where care can be obtained. Proper insurance solutions should therefore provide complete coverage and include evacuation benefits allowing for remedy in a specified country (see also the post dedicated to Medical Networks from Europ Assistance).

Multinational organisations can discover that implementing employee benefits solutions in Africa is a complicated undertaking, especially when seeking to provide benefits corresponding to western standards.

No matter how the influx of multinationals seeking skilled workers represents the driver for real growth and change in Employee Benefits.

Not only these businesses employ adequate employee benefits and contribute to growing local protection criteria, but they also highlight how to use them as a way of acquiring and keeping valuable skills by incorporating them into their retention programmes. Their expertise compels local companies to provide similar advantages.

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