TOUR OF FRANCOPHONE AFRICA Life Insurance in the FANAFarea

Presented by Claude Daté GBIKPI

Managing Director GTAC2A-VIE (TOGO)

        

INTRODUCTION 

Over a total of US 4.597 billion in 2011, Africa represents 2.2% (Life & non Life market) of the world insurance market of which 53% as share for non-life and 47% for life. South Africa alone holds 90% of the 2.2%.

Over the remaining10%, the share of the FANAF zone represents less than 4%.

The hereby study aims at presenting the development of the life insurance market in the16 countries of the FANAF zone over the period 2007 to 201I.  

OUTLINE OF THE STUDY

I - Presentation of the region

II – The countries of the region

III – development of the life premiums issued

IV - Profil of the countries studied

V - Other information

 I - PRESENTATION OF THE REGION 

  

II – THE COUNTRIES OF THE REGION

By alphabetic order BENIN (BEN) GUINEA CONAKRY (GIN)

BURKINA FASO (BFA) MADAGASCAR (MGA)

BURUNDI (BDI) MALI (MLI)

CAMEROON (CMR) NIGER (NER)

CENTRAL AFRICA (CAF) RWANDA (RWA)

CONGO BRAZZAVILLE (COG) SENEGAL (SEN)

COTE D’IVOIRE (CIV) TCHAD (TCD)

GABON (GAB) TOGO (TGO)

 III - DEVELOPMENT OF LIFE PREMIUMS ISSUED

In 2011, the16 countries except Madagascar and Guinea Conakry (data 2008) collected in terms of direct turnover 210 milliards of francs CFA de net of avoidance premium (321 million Euros) that is a progress of 7.1% par rapport à 2010.These premiums represent 28% of the total amount of premiums issued (life & non-life) of the region.

Tableau 1 : Development of Life premiums issued from 2007 to 2011

Bénin BEN 5.9 25.9 7.8 31.3 8.2 4.8 9.6 17.3 10.2 7.1Burkina Faso BFA 8.3 66.6 8.5 2.1 8.9 4.0 12.4 40.3 12.5 0.1Burundi BDI 1.0 21.1 1.2 22.4 1.3 7.8 1.3 0.0 1.3 0.0Cameroun CMR 22.3 21.4 25.2 13.2 28.2 11.7 30.7 8.9 34.8 13.5Centrafrique CAF 0.0 -9.2 0.1 34.3 0.0 -31.7 0.1 107.7 0.1 -19.8Congo BrazavilleCOG 0.3 255.8 1.1 332.8 1.5 38.0 3.2 113.7 3.5 8.1Côte d'Ivoire CIV 60.3 8.9 66.7 10.6 71.0 6.5 82.0 15.5 79.4 -3.2Gabon GAB 9.0 17.3 10.3 14.1 12.1 17.5 12.3 1.7 15.2 23.4Guinée ConakryGIN 0.1 -87.7 0.2 9.3 0.2 0.0 0.2 0.0 0.2 0.0Madagascar MGA 2.0 0.0 2.0 0.0 2.0 0.0 2.0 0.0 2.0 0.0Mali MLI 2.3 28.0 2.5 11.4 2.5 1.1 4.0 57.7 6.1 52.9Niger NER 1.8 58.6 2.3 26.9 2.8 22.0 2.8 2.1 2.7 -3.4Rwanda RWA 1.7 18.4 4.5 159.3 3.8 -15.4 5.6 45.1 5.9 5.4

Sénégal SEN 13.3 10.4 20.7 55.2 16.4 -20.7 19.7 20.4 22.6 14.5Tchad TCD 0.3 52.0 0.4 21.7 0.7 73.0 0.8 6.4 0.7 -16.4Togo TGO 4.2 22.3 6.6 57.3 8.1 22.7 9.7 20.6 13.3 36.7Affaires directes 132.9 15.5 160.0 20.4 167.7 4.8 196.4 17.1 210.4 7.1

Primes EmisesVariations Annuelles

(%)

2010 2011

Variations Annuelles (%)

Primes Emises

Primes émises 2007 2008 2009

de fracs CFA)(en milliards

Primes EmisesVariations Annuelles

(%)Primes Emises

Variations Annuelles (%)

Primes EmisesVariations Annuelles

(%)

Share by country of the zone Source: FANAF

Graph 1 : Development of the Life premiums from 2007 - 2011

(in francs CFA billion) 

Graph 2 : Development of Life premiums by country in 2011 

 

Comment on the Graph 2         (Life premiums by country in 2011)In 2011, the main market remains Côte d’Ivoire

with 79.4 billion francs CFA, that is 38 % of the FANAF market, followed by Cameroon (16%), Senegal (11%). These three countries represent 65% of the market studied.

Then come : Gabon (7%), Burkina (6%), Togo (6%) and Benin (5%).

The other countries (Congo Brazzaville, Burundi, Central Africa, Guinea Conakry, Madagascar, Mali, Niger, Rwanda, Tchad) have a total of 11%.

Graph 3 : Growth rate of the Life premiums by country in 2011

Comment on graph 3(Growth rate of the Life premiums by

country in 2011 )

In 2011, Mali had the most outstanding growth(+52.9%) followed byTogo (+36.7%) andGabon (+23.4%).

Tableau 2 : 

2007 2008 2009 2010 2011Bénin BEN 0.22 0.26 0.26 0.29 0.30Burkina Faso BFA 0.26 0.23 0.22 0.28 0.26Burundi BDI 0.23 0.22 0.21 0.13 0.11Cameroun CMR 0.23 0.24 0.27 0.28 0.29Centrafrique CAF 0.01 0.01 0.00 0.01 0.01Congo Brazaville COG 0.01 0.02 0.03 0.05 0.05Côte d'Ivoire CIV 0.64 0.64 0.65 0.72 0.70Gabon GAB 0.16 0.16 0.23 0.19 0.19Guinée Conakry GIN 0.01 0.01 0.01 0.01 0.01Madagascar MGA 0.06 0.04 0.05 0.05 0.04Mali MLI 0.07 0.06 0.06 0.09 0.12Niger NER 0.09 0.09 0.11 0.11 0.10Rwanda RWA 0.11 0.20 0.16 0.21 0.20Sénégal SEN 0.25 0.35 0.27 0.31 0.33Tchad TCD 0.01 0.01 0.02 0.02 0.01Togo TGO 0.35 0.51 0.54 0.62 0.78Médiane FAN 0.14 0.18 0.19 0.16 0.16

Primes Emises VIE(en % du PIB)

Share of the Life premiums issued in the GDP by country from 2007 to 2011Source: FANAF

Graph 4 : Ratio premiums issued out of the GDP by country in 2011

TGO CIV SEN BEN CMR BFA RWA GAB FAN MLI BDI NER COG MGA CAF GIN TCD

0.78%

0.70%

0.33%0.30%0.29%

0.26%0.20%0.19%

0.16%0.12%0.11%0.10%

0.05%0.04%0.01%0.01%0.01%

Comment on Graph 4  :(Ratio premiums issued out GDP by

country in 2011)

The penetration rate inthe area is generally below 1%.

In 2011, Togo had the highest ratio with 0.8% follows Côte-d’Ivoire (0.70%) which is stagnating a little compared with Togo that had an outstanding progress moving from 0.35% in 2007 to 0.78% in 2011.

Graph 5 : Illustration of the development of the shares of the premiums issued in the GDP of the region from 2007 to 2011

2007 2008 2009 2010 20110.000.020.040.060.080.100.120.140.160.180.20

0.14

0.18

0.19

0.16 0.16

Table 3Share of the life premiums issued per inhabitant from 2007 to 2011 Source: FANAF PREMIUMS ISSUED per inhabitant( in F. CFA) 

 LIFE

        2 007            2 008            2 009            2 010            2 011   

 Benin   BEN  754 960 869 992 1 033

 Burkina   BFA  608 607 617 846 828

 Burundi   BDI  127 152 161 158 155

 Cameroon   CMR  1 181 1 301 1 415 1 502 1 664

 Centrafrique   CAF  10 14 9 18 14

 Congo Braz   COG  71 300 402 834 876

 Cote d'Ivoire   CIV  2 992 3 213 3 322 3 724 3 501

 Gabon   GAB  6 305 7 088 8 207 8 232 10 011

 Guinea   GIN  14 15 15 15 14

 Madagascar   MGA  100 97 95 92 90

 Mali   MLI  173 188 195 261 386

 Niger   NER  135 166 196 194 182

 Rwanda   RWA  186 472 391 556 574

 Senegal   SEN  1 089 1 650 1 277 1 502 1 678

 Tchad   TCD  37 44 74 76 62

 Togo   TGO  648 994 1 191 1 400 1 866

 Mediane   FAN  179 386 396 695 701

Graph 6 : Life premiums issued per inhabitant and per country in 2011 (in F.CFA)

BEN BFA BDI CMR CAF COG CIV GAB GIN MGA MLI NER RWA SEN TCD TGO -

2,000

4,000

6,000

8,000

10,000

12,000

1.033  828    

 155    

1.664

 14    

 876    

3.501

10.11

 14      90     386      182    

 574    

1.678

 62    

1.866

Comment on the graph 6(Life premiums issued per inhabitant

and per country in 2011 (in F.CFA)

Significant disparity depending on the country(from 14 francs to 10 011 francs)

In 2011, the highest average of premiums élevée was in Gabon

(10 011) before Côte d’Ivoire (3 501) and Togo (1 866)

Graph 7 : Life premiums issued per inhabitant from 2007 to 2011

2,007 2,008 2,009 2,010 2,011 -

100

200

300

400

500

600

700

800

179

386 396

695 701

IV – Profile of the countries studied

Number of companies in 2011

The region has164 member companies of which :- 44 life companies ;- 105 non-life companies;- 13 Reinsurance companies or regional offices ;- 2 funds guarranteeing liabilities 

Types of products marketed

They can be grouped in three main branches :- Individual Insurances : In the case life ;

in case of death ; endowment ; saving ; capitalization and supplementary insurance. There are Retirement with or without death, term death, Group Borrower with the la coverage Job Loss etc… They represent 51% of the premiums collected in 2011.

- Collective Insurances : in the case of life; in case death ; endowment ; saving ; capitalization and supplementary insurance.We can quote termination allowances ; Global retirement ; Corporate provision. They represent 48% of the premiums.

- Acceptances 1%

Table 4 : Life premiums issued per product branch in 2010 & 2011

 Life branch(Figure in francs CFA million)              2 010               2 011   

 Var. 2011/2010 

in % 

 Individual Insurances        106 923           105 545    -1.3%

 Collective Insurances       86 064.3       101 216.1    17.6%

 Acceptances         1 886.2            2 067.8    9.6%

 Total        194 874        208 828.9    7.2%

Graph 8 : Distribution of the life premiums issued per branch in 2011

51%48%

1%

Assurances Individuelles Assurrances collectives Acceptations

Comment on graph 8(Distribution of the life premiums

issued per branch in 2011)

Individual Insurance represent 51% of the premiums collected in 2011 and collective Issurances 48%

V – Other information

Distribution Network BrokersMiddlemen commissioned by the

company General agents Life insurance adviser

FreelancersBanksBanKinsurance

Micro insuranceIt is one of the innovations of the Cima code with the birth of the book VII. It is characterized by :

Low premium and /or proceeds.

Simplicity of the coverage, underwriting formalities, of the management of contracts, of the statements of claims and the compensation victims.

Protection of low income people against specific risks enin consideration of payment of premiums or assessment

Drafting of contract in a simple, clear style that can be easily understandable by the target population and notwithstanding the provisions of the article7, the contract may be translated and marketed the local language of the target population.

Clauses related to the sending of registered letter are facultative, a mere letter.

The Insurer must pay the surrender value within the10 days under the condition of two months payment or when10% of the premiums planned in the contract have been paid.

Can be underwritten by :A legal entityA company for employeesA communauty for membersA natural person

Implementation of new mortality tables

The stakes of the reform: Provide Life insurance companies with adapted tools for life risks pricing in Africa Set up a life risk piloting culture with statistics specific to our environment.

The regulation 0006/CIMA/PCMA/PCE/2012 dated October 4th 2012 (which has a binding force since February 2013) relating to the implementation of new mortality tables leads to a review of the prices and change in the general conditions of contracts.

For Insurances in case death, the CIMA table replaces theTD regulatory table H.

For insurance in case of life, the CIMA table F replaces the regulatory table TV.

The coming into force of these tables impacts both on the prices and reserves :

Review of prices and change in the general conditions of contracts;

Processing of deviations (if any) of the reserves

For contracts in case of death, a decrease in the price from 6% to 35% and from10% to 35% for the provisions.

For mixed contracts, a decrease in the prices from 1 to 18% and a negligible impact on the provisioning.

For contracts in case of life, the CIMA table F will lead to an increase in the prices from 1 to 60% and more for termination allowance contracts. It is the same thing for provisions. The increase becomes more intense with the duration durée and seniority of the contracts

The new tables will enter into the pricing of new businesses and the renewal of annual contracts by automatic renewal starting from the effective date of the regulation relating to their adoption.

THANK YOU FOR YOUR ATTENTION