Interview: Christian Boucher
What challenges does the expansion in the freight-forwarding sector pose in providing adequate cargo insurance coverage?
CHRISTIAN BOUCHER: Although the demand for insurance services in the transport sector has definitely increased, the capacity and tools to provide sufficient coverage are present. Specific insurances adapted to international maritime transport and dispatch of these goods, mainly to Ethiopia, are currently providing coverage under the land transport insurance package, which covers all damage that occurs before the transported goods reach their final destination.
In providing insurance products adapted to all types of goods, even those of very high value, the insurance sector in Djibouti cooperates closely with re-insurers and brokers who can propose solutions that ensure adequate coverage for different types of freight.
Through which mechanisms can regional integration in the field of insurance be promoted?
BOUCHER: A good example of an already existing regional insurance mechanism is the Common Market for Eastern and Southern Africa (COMESA) “yellow card” system, which is recognised by all COMESA member-states and allows for civil liability insurance on all COMESA territory. Every participating member state has put in place a national office that manages the losses incurred by vehicles coming from other COMESA countries. Under this system the yellow-card office of Djibouti, for example, covers the damage resulting from accidents caused by Ethiopian transport vehicles on the territory of Djibouti.
Following the expansion of traffic, the national office in Djibouti has seen an increase of nearly 40% in activities. The reimbursements of these losses are managed by another COMESA member-state, and are being carried out by a specific compensation system called the Regional Customs Guarantee Transit Scheme based in Kenya. Also, the system of Customs insurance guarantees the exemption of payment of duties and taxes until the goods arrive at their final destination.
Measures like these reinforce the efficiency of trans-border logistics by reducing obstacles that impact transit time. Although trans-border insurance coverage is well-established, what is now important is to make more people aware of these specific types of coverage. We want to emphasise their importance in keeping people, their families and their businesses safe and protected.
How can insurance companies and employers work together to promote access to insurance services in Djibouti?
BOUCHER: It is important for employers to become more involved in facilitating the insurance coverage of their employees by utilising credit systems or participation in group insurance programmes, which will greatly reduce the rates of insurance premiums. In terms of the share insurance system, a coinsurance system between insurance companies, we already have implemented this in order to minimise the costs of insurance for individuals and professionals. An example of this would be the cooperation between Amerga and GXA concerning all risks related to public transport. We have reduced the price by half in order to increase access to insurance services for transport companies. In order to expand the life insurance and health insurance rates, it is important to provide more tax incentives to further develop the usage of these important products. A decrease in the tax on this type of insurance contract would immediately make these services more accessible and attractive to a wider audience in Djibouti.
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