Insurance: Indispensable Role In Economic Development

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Insurance: Indispensable Role In Economic Development

31 mai 2020 07:26

The core function of insurance is risk protection for individuals, companies, institutions as well as the public sector.

Cameroon today counts some 27 insurance companies to go by the 2018 Annual Report of the insurance sector published by the Ministry of Finance. With this number, penetration rate still remains very low in the country with just 0.97 per cent according to the same report. This figure is telling of the ignorance of most Cameroonians to the role of insurance in the economic development of the country in general and risk security in particular. Cameroon operates various types of insurance policies which includes life insurance, automobile, travel insurance, health insurance transport insurance, property and casualty insurance amongst others. However, the core insurance function is risk protection Individuals, companies, institutions or the public sector seek protection against financial losses or adverse events. The scope of protection and the associated conditions and financial commitments are normally defined in a non-negotiable (i.e. non-tradable) contract between the insurance company and a policy holder, transacted on an overthe-counter basis (possibly through a network of agents or brokers). By signing the contract and paying the insurance premium, the risk is transferred from the insured to the company. Examples of property and casualty insurance are; protection against fires, car accidents, homeowner and liability insurance, and protection against natural disasters (earthquakes, flooding and droughts). In health insurance, the focus is on protection against biometric risks such as morbidity, or occupational disability. The role of the insurance sector in the economic development of the country cannot be over emphasised. Apart from serving as a risk guarantee for investment projects, insurance companies equally pay taxes to the state. Investors and economic operators can only take the risk if the insurance is there to assure protection from any financial losses in the event of a calamity (accident, fir...