Although Côte d’Ivoire’s insurance sector is progressing each year and has a substantial direct and indirect impact on the economy and job creation, the penetration rate – measured as premium relative to GDP – remains low. While combined life and non-life insurance sector premium nearly doubled from CFA270bn ($464.1m) in 2015 to CFA462.7bn ($795.4m) in 2021, the 2-3% insurance penetration rate is below that of South Africa, which leads the continent at 14%, and below the global average of 7%.
The factors contributing to the low penetration rate include a lack of public awareness and education about the industry as a whole. Other reasons include limited access to insurance services and low levels of financial literacy and banking penetration. To date, foreign firms operating in the country and employees of large international corporations are the primary beneficiaries of insurance products.
Structure & Oversight
The sector has benefitted from the economic integration of West African countries. In terms of industry regulation and oversight, Côte d’Ivoire is connected with the 13 other member countries of the Inter-African Conference on Insurance Markets (Conférence Interafricaine des Marchés d’Assurances, CIMA). Foreign insurers are permitted to operate local branches, but they must adhere to the CIMA code in the same way as local firms. For example, insurers in the zone have a minimum capital requirement of CFA3bn ($5.2m), which is expected to rise to CFA5bn ($8.6m) by 2024. In addition, they must comply with any on-site and off-site inspections that CIMA carries out.
Côte d’Ivoire is a key regional player in the insurance sector, accounting for most of West Africa’s premium and home to the headquarters of the bloc’s biggest insurance companies. As of May 2022, 32 companies were operating in the country – 21 in non-life and 11 in life segments.
The sector is dominated by five players, which include a mix of local, pan-African and international companies. In 2021 South Africa’s Sanlam Group led the non-life segment with a 22% market share. Within the broader non-life category, auto coverage captured 32% market share, at CFA65.5bn ($112.6m). Health insurance followed with 29% and CFA59.2bn ($101.8m) in premium, and fire insurance earned a 20% share with CFA40.9bn ($70.3m) in premium. The remaining largest non-life segments in 2021 were cargo and transportation insurance, with 9%; public liability insurance, with 4%; and personal accident and other risk insurance, with 6%. In the life segment, five players command the landscape with a combined 70% market share; pan-African SUNU Group has the largest stake, at 29.3%, followed by Ivorian NSIA with 20%, Germany’s Allianz with 14.8%, Sanlam with 13% and Morocco’s Wafa Assurance with 7%.
Performance & Size
The insurance market in Côte d’Ivoire has seen a substantial increase in the life and non-life segments. Premium in the non-life segment increased by 11.2% in 2021 to CFA257bn ($441.8m), up from CFA231bn ($397.1m) in 2020. The life segment recorded a similar growth rate of 12.8% in 2021 and reached CFA204bn ($350.7m), as compared to CFA181bn ($311.1m) in 2020. As a result, the combined turnover of the life and non-life insurance market in Côte d’Ivoire grew to CFA462.7bn ($795.4m) in 2021, up 11.9% from CFA413.6bn ($711m) in 2020.
The sector’s overall expansion is reflected in the performance of the individual players, particularly the newcomers to the Ivorian market. Génération Nouvelle d’Assurances Côte d’Ivoire (GNA), which has been active in the country since 2008, achieved the highest growth in 2021, at 175.8%. SMABTP, which entered the Ivorian market in 2017, earned a modest turnover of CFA3.4bn ($5.8m) in 2021 and recorded the second-highest growth rate, at 143%. Cameroon-based Activa Assurances came in third in 2021 and recorded a 124% growth rate. However, the recent increase in premium has not been accompanied by a rise in market penetration. “The insurance sector is very closely linked to the economic situation – it even reflects it. For example, when the GDP growth rate decelerates, we can expect to see a similar decline in activity in the sector,” Romuald Kouassi, general director at GNA Assurance, told OBG.
Non-life & Life
Five major insurance companies retained their market positions from 2020 to 2021. Among the biggest players in the non-life market, Sanlam solidified its top spot among the industry’s major competitors with a growth rate of 7.8% in 2021 and a total turnover of CFA56.6bn ($97.3m). Following Sanlam, Allianz held on to second place and grew by 8.7%, reaching CFA29bn ($49.9m). NSIA retained its number-three position, growing by 11.8% and reaching CFA24bn ($41.3m). France’s AXA and SUNU Group were the fourth- and fifth-biggest players in terms of market share, growing at 8.4% and 3.8%, respectively.
Within the non-life insurance space, individual subsegments largely retained their market share and positions. Auto coverage maintained its standing as the largest subsegment, with 32% in 2021, compared to 34% in 2020. Following closely behind was health insurance, which dropped slightly from 30% to 29%. The fire insurance subsegment saw an increase in its market share to 20%, up from 17% in 2020.
Among the insurance companies active in the life segment, Leadway earned the top spot in 2021. The firm boosted its overall turnover, jumping 72.1% from CFA1.2bn ($2.1m) in 2020 to CFA2.1bn ($3.6m). Similar to the non-life insurance segment, the largest players retained their market positions from 2020 to 2021. SUNU Group remained the biggest player in terms of turnover, growing by 10.6% and reaching CFA60.2bn ($103.5m) in 2021. Following SUNU Group, NSIA was the second-largest company in the life segment, experiencing a growth rate of 17.3% and bringing the group’s total turnover to CFA41.1bn ($70.7m), up from CFA35bn ($60.2m) in 2020. With growth rates of 10.1% and 2.7%, respectively, Allianz and Sanlam were the third- and fourth-largest companies in the Ivorian life insurance market that year. Rounding out the top five, Wafa Assurance experienced substantial growth of 43.7%, from CFA9.9bn ($17m) in premium in 2020 to CFA14.2bn ($24.4m) in 2021.
Despite this performance, coverage uptake remains the biggest obstacle to the sector’s competitiveness. “The Ivorian insurance market has experienced robust, sustained growth over the years in terms of premium. However, this is less significant in light of the relatively small penetration rate. As such, the top priority is how to increase the number of people covered, which is essential for the development of the market,” Luc Noubissi, senior insurance specialist at CIMA, told OBG.
Some stakeholders believe that the low penetration stems in part from mistrust of insurance companies. “There has been relatively stagnant growth in the insurance penetration rate in Côte d’Ivoire, as well as a lack of general awareness about the different insurance products on offer. Some failures to pay claims on time have also negatively impacted confidence in the sector,” Balamine Dicoh, executive secretary of the ECOWAS Brown Card Scheme, told OBG.
Automobile Insurance
Automobile liability insurance is mandatory in order to cover damages or injuries in the event of a traffic accident. It comprises the largest share of non-life insurance premium, at 32% of the market. Regional harmonisation of the regulations governing auto insurance across ECOWAS has been a welcome step for motorists. Thanks to the Brown Card initiative introduced as part of the revisions, drivers are protected by their local insurance when travelling through ECOWAS nations. Furthermore, they are exempt from formalities regarding legal liability since government authorities in the bloc recognise the brown card.
La Poste de Côte d’Ivoire, the nation’s postal service, has been distributing automotive insurance goods since June 2021. Its Poste Auto product, which is accessible at post office locations across the country, allows drivers to renew or purchase insurance policies for their vehicles and submit claims. To improve the customer experience, staff members complete specialised training on insurance products, claims management practices and customer service. Pan-African Sonam Générale Assurances and insurance broker Inclusive Guarantee collaborated to carry out the programme. Through this campaign, the authorities hope to boost the penetration rate of motor insurance.
In July 2021 the Directorate General of the Treasury and Public Accounting and the Association of Insurance Companies of Côte d’Ivoire (Association des Sociétés d’Assurances de Côte d’Ivoire, ASA-CI), signed an agreement to create a digital platform to produce and manage motor insurance certificates. The platform, which aims to streamline processes in the sector, will operate on a secure server and will generate encrypted electronic certificate numbers. It will also monitor civil liability and mandatory tariffs. The digitalisation project “will make it possible to accelerate the process of compensating victims and fighting against uninsured vehicles,” Mamadou Koné, president of ASA-CI, told local media.
Health Insurance
With an average annual growth rate of 10% over the last five years, the health insurance market has outperformed all other policy lines. This performance is largely attributable to higher rates set by health maintenance organisations (HMOs) rather than increasing insurance penetration. In recent years, growing use of medical services and hospitalisations have increased health insurance rates alongside the rising cost of health care.
Elevated costs in the segment are also related to administrative factors at the hospital level. For example, some health care facilities face payment delays when patients are covered by third-party insurers. Additionally, the diversity of players – in particular insurance companies and HMOs, each with its own management platform and coding system – adds to the administrative costs for clinics and can lengthen the time and resources needed to provide patient care.
Micro-insurance
Companies aim to expand their market by offering micro-insurance to the large proportion of Ivorians working in the informal sector. The increasing adoption of mobile money and digital financial services has paved the way for digital operators to offer 100% digital insurance products for low-income populations that lack access to traditional insurance products. For example, micro-insurance financial technology (fintech) firm aYo, in collaboration with Sanlam and telecommunications operator MTN, began offering hospitalisation and death coverage of up to CFA600,000 ($1030) using mobile phones and mobile money in August 2021.
Micro-insurance is expected to play an increasingly important role in the agriculture sector as well, which is the largest source of employment for Ivorians (see Agriculture chapter). Agriculture insurance technology (insurtech) start-up OKO offers inclusive agricultural and crop micro-insurance aimed at securing the income of small-scale farmers affected by unfavourable weather conditions, droughts and floods. The company operates in cooperation with Allianz Re, which analyses and approves risk calculations, as well as other local insurance partners, and uses satellite data and mobile money transfer services to design automated micro-insurance products. As an emerging pan-African player, OKO established a presence in Uganda and Mali, where it has about 7000 customers and compensated more than 1000 flood-affected farmers in 2020. The start-up raised $1.2m in funding in April 2021 which will be used for its expansion into the Ivorian market.
Distribution Channels
The distribution of insurance products in the country relies on insurance brokerage firms and professionals, who act as intermediaries between clients and insurance firms, guaranteeing terms, coverage and payment conditions. As of May 2022, 334 brokerage firms and professionals were active in Côte d’Ivoire. As a regional regulator, CIMA works in coordination with the ministries of finance in its member states and is in charge of licensing and supporting insurance intermediaries, and implementing training and certification programmes for insurance professionals.
To expand their footprint, brokerages are innovating product design to improve access and customer experience. Insurtech start-up Baloon offers digital insurance products online and through the company’s mobile application. The company, which first developed on a business-to-consumer distribution model for automobile coverage, has now expanded into health and travel insurance, working with both insurers and brokers. Baloon currently serves some 20,000 customers within francophone Africa.
Another notable player is Abidjan-based consulting firm and insurance brokerage Optimus, which serves small and medium-sized businesses. In collaboration with Dakar-based insurtech company Assuraf, it launched a digital insurance platform in January 2022 to provide access to insurance. The solution provides insurance issuance, renewal and premium comparison services for all segments. The company offers a 100% digital insurance product, including quotations, subscriptions, payment and claims reporting.
Reinsurance
Amendments to Article 308 – which limits local insurers’ reinsurance cessions outside of the CIMA zone and adjusts the percentage of reinsurance transfer based on the type of activity – has had a significant impact on the regional reinsurance market. The reforms require full local ceding of coverage for small risk segments such as health, vehicle, accidents and life; this was previously capped to a maximum of 75% outside of CIMA. Up to 50% of risks including property damage and general civil liability may be transferred beyond the zone, with exceptions only approved by national ministries of finance.
Côte d’Ivoire’s position in the bloc’s reinsurance market has improved as a result of the reforms, making it easier for international companies to open offices there. Morocco’s Wafa IMA Assistance is the most recent entrant, receiving an operating licence for its reinsurance business in August 2021. The company’s Abidjan office will support the group’s activities in Côte d’Ivoire, Cameroon, Senegal and Mali. It joins Swiss Re, the world’s largest reinsurer by net premium written; Germany’s Hannover Re; Kenya’s Kenya Re and ZEP-RE; Sierra Leone’s WAICA Re; and Morocco’s Société Centrale de Réassurance, which all opened offices in the country between 2017 and 2018. However, the Ivorian reinsurance market remains dominated by pan-African reinsurers, CICA-RE and Africa Re, with local players NCA Re and Aveni Re Assurance dominant in the property damage segment.
Outlook
New opportunities for the insurance industry will arise as a result of economic progress and diversification in Côte d’Ivoire as well as the larger CIMA area. The growing middle class and the country’s transition from an informal economy to a formal one will create a broader need for diversified insurance offerings. Local insurance players will be better able to operate outside of the bloc as a result of the gradual alignment of CIMA legislation with those of the other regional economic unions on the African continent. However, to increase the level of trust in the system, insurance companies will need to reassure consumers by upholding their contractual commitments and expediting claims settlement.
Innovation and digitalisation will be central to efforts to expand product selection to attract the country’s large underinsured population. The growing importance and adoption of digital financial services and mobile money products are expected to facilitate partnerships between insurance companies and mobile solution providers to offer digital insurance products, including micro-insurance. Expansion of the distribution channels from traditional insurance companies and banking networks will also go hand in hand with Côte d’Ivoire’s financial inclusion strategy.
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