Interview : Mohamed Bah
How is the local industry being impacted by regulations issued by the Inter-African Conference of Insurance Markets (Conférence Inter-africaine des Marchés d’Assurance, CIMA)?
MOHAMED BAH: Several regulations are in place. First, a regulation on capital requires that insurers increase their capital to CFA3bn (€4.5m) by 2019 and CFA5bn (€7.5m) by 2021. In some CIMA countries this provision could have a significant impact on the profitability of insurance companies. This is not the case for Côte d’Ivoire, which makes up the largest share of the market at around 35%. Second, some technical constraints have been implemented. They aim to reinforce the criteria of prudence, which will affect the profitability of insurance companies. These provisional regulations will affect both life and non-life branches.
By complying with these rules, companies will be compelled to seek new growth markets in order to survive. These measures will therefore benefit the local population in terms of access to insurance products.
How can insurance penetration rates be improved?
BAH: The insurance sector in Côte d’Ivoire did not develop until about 40 years ago. However, penetration rates are relatively high compared to other countries in the region. For example, almost all private sector employees are given health or pension insurance by their employer. Government intervention in this area has encouraged the sector to develop. For example, in the early 2000s a tax incentive for companies with End-of-Care Indemnity insurance for their employees contributed to the growth of the life insurance market. Therefore, insurance for workers in the informal sector is an area in which the industry could develop.
Insurers are also responsible for informing citizens about the types of insurance available to them. A national campaign was launched through the Association of Insurance Companies of Côte d’Ivoire ( Association des Sociétés d’Assurance de Côte d’Ivoire, ASA-CI).
Lastly, insurers must build services to bring them closer to their customers. This is becoming possible thanks to technology; for example, insurers in Nigeria are developing a way to check the validity of auto insurance using a mobile phone. In Côte d’Ivoire, insurers are working on a smartphone app for reporting road accidents. This is faster and more convenient for the driver, as well as a more transparent form of communication.
What disruptive changes will the use of digital technology bring to the insurance sector?
BAH: The main challenge for the sector’s development remains the ability of companies to come into contact with their target market. Digitalisation will help promote insurance services to individuals that may not be reached by traditional approaches such as brokers and agents. The emergence of digital telecommunications or transaction tools should increase the penetration rate of our services. The search for customer loyalty has led telecommunication companies to collaborate with insurance companies to offer their customers access to health insurance services as a reward for a certain level of consumption of their products. This has been successful as not only do customers take advantage of the offer, but they are also more likely to subscribe to other insurance products.
What opportunities are ripe for development?
BAH: Côte d’Ivoire benefits from being part of an integrated insurance market of 14 countries that share the same insurance code, currency and business law. Despite its influential position, penetration is relatively low at around 2% of the population. Therefore, there is significant potential for growth. Côte d’Ivoire is a driving force of developments in CIMA due to the size of its market. It is common for initiatives taken on a national level to also be implemented in the wider region. Furthermore, the presence of companies driving digital transformation should encourage investment.
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