FANAF insurance market in 2015 and impact of the new regulation
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The FANAF insurance market in 2015
The Federation of national African insurance companies (FANAF) is currently made up of 200 insurance companies operating in 29 member countries.
By the end of 2015, all the afore-mentioned countries reported 1134.9 billion FCFA (1.89 billion USD) in premiums excluding reinsurance acceptance, an increase of 11.44% in local currency in comparison with 2014, but only 0.2% rise when translated into dollars.
Over the period of five years, from 2011 to 2015, the collection of premiums had grown by 45.6%. The breakdown per class of business has confirmed the weight of the non life insurance which accounted for 72.5% of the overall premiums reported in 2015.
During the year under review, the African insurance market exhibited signs of slowdown in 2015, with the overall premiums shrinking by 8.5% at 64.123 billion USD, compared to 70.116 billion USD in 2014.
The continent has been seriously strained by the depreciation of local currencies against the American dollar. Furthermore, the markets had to undergo numerous structural challenges: harmonization of the legal framework, digitization, microinsurance.
The African market, undergoing drastic reshape, is endowed with a substantial growth potential. For 2015, the continent exhibited a penetration rate of 2.9% and an average insurance density of 54.7 USD.
African insurance in 2015
| Premiums (in millions USD) | Life insurance share | Non life insurance share | Penetration rate | Density | |
|---|---|---|---|---|---|
World | 4553 789 | 56% | 44% | 6.23% | 621.2 USD |
Africa | 64123 | 68% | 32% | 2.9% | 54.7 USD |
FANAF zone | 1 890 | 27.5% | 72.5% | 0.89% | 6.14 USD |
FANAF insurance market: evolution of life and non life premiums: 2011-2015
in thousands USD| 2011 | 2011 share | 2012 | 2012 share | 2013 | 2013 share | 2014 | 2014 share | 2015 | 2015 share | |
|---|---|---|---|---|---|---|---|---|---|---|
Non life | 1 133 601 | 72.3% | 1 248 146 | 72.09% | 1 459 159 | 72.75% | 1 356 766 | 71.90% | 1 370 785 | 72.5% |
Life | 433 370 | 27.7% | 483 348 | 27.91% | 546 529 | 27.25% | 530 329 | 28.10% | 519 958 | 27.5% |
Total | 1 566 971 | 100% | 1 731 494 | 100% | 2 005 688 | 100% | 1 887 095 | 100% | 1 890 743 | 100% |
FANAF insurance market: evolution of premiums per country: 2011-2015
in USD| 2011 | 2012 | 2013 | 2014 | 2015 | 2014/2015 evolution | |
|---|---|---|---|---|---|---|
Côte d’Ivoire | 366 806 400 | 417 125 400 | 494 498 600 | 458 061 600 | 464 647 400 | 1.43% |
Cameroon | 277 316 900 | 295 783 500 | 327 078 200 | 284 991 400 | 293 049 400 | 2.82% |
Senegal | 184 609 800 | 184 132 800 | 199 939 400 | 185 300 000 | 199 253 600 | 7.53% |
Gabon | 183 403 200 | 198 669 600 | 238 332 800 | 219 951 100 | 194 588 800 | -11.50% |
Congo Brazzaville | 77 423 500 | 112 862 100 | 143 713 000 | 130 080 600 | 154 105 000 | 18.46% |
Rwanda | 53 090 400 | 53 301 600 | 60 842 000 | 106 362 200 | 95 628 400 | -10.09% |
Burkina Faso | 72 999 300 | 85 807 500 | 97 347 200 | 93 020 600 | 94 962 000 | 2.08% |
Togo | 71 993 800 | 75 712 500 | 84 129 800 | 81 902 600 | 79 301 600 | -3.17% |
Benin | 68 575 100 | 69 049 800 | 88 116 000 | 74 490 600 | 75 803 000 | 1.76% |
Mali | 59 324 500 | 57 743 400 | 60 212 600 | 59 296 000 | 57 976 800 | -2.22% |
Madagascar | 56 308 000 | 60 368 100 | 67 555 600 | 59 666 600 | 53 645 200 (1) | -10.09% |
Niger | 40 220 000 | 44 216 100 | 53 708 800 | 48 363 300 | 48 314 000 | -0.10% |
Guinea Conakry | 11 060 500 | 29 073 600 | 36 924 800 | 32 612 800 | 29 321 600 (1) | -10.09% |
Chad | 16 490 200 | 20 391 900 | 26 015 200 | 25 200 800 | 23 990 400(2) | -4.80% |
Burundi | 19 908 900 | 18 978 600 | 21 819 200 | 23 347 800 | 20 991 600 | -10.09% |
Central African Republic | 7 440 700 | 8 277 900 | 5 454 800 | 4 447 200 | 5 164 600 | 16.13% |
Total | 1 566 971 200 | 1 731 494 400 | 2 005 688 000 | 1 887 095 200 | 1 890 743 400 | 0.19% |
(2) Same figures as 2014 in FCFA
In terms of premiums, Côte d’Ivoire largely tops the ranking with a market share of 24.57% in 2015, followed by Cameroon (15.5%), Senegal (10.5%) and Gabon (10.29%). In 2015, Senegal recovered the fifth position it had lost in 2012.
Still in 2015, the highest progression rates reported for the zone under study were in Congo Brazzaville (+31.76%), the Republic of Central Africa (+29.16%) and Senegal (+19.6%).
FANAF insurance market: evolution of premiums, losses and loadings expenses * 2007-2015
in USD| Year | Premiums | Evolution | Losses | Evolution | Loadings | Evolution |
|---|---|---|---|---|---|---|
| 2007 | 1 279 551 000 | 15,59% | 519 603 000 | -5.50% | 483 894 600 | 15.49% |
| 2008 | 1 351 680 000 | 5.63% | 528 440 000 | 1,70% | 507 100 000 | 4.79% |
| 2009 | 1 462 224 000 | 8.18% | 658 223 700 | 24.55% | 563 268 300 | 11.07% |
| 2010 | 1 490 826 000 | 1.95% | 624 992 200 | -5.05% | 558 389 600 | -0.86% |
| 2011 | 1 566 971 200 | 5.11% | 617 377 000 | -1.22% | 583 391 100 | 4.47% |
| 2012 | 1 731 494 400 | 10.50% | 689 892 300 | 11.75% | 594 595 500 | 1.92% |
| 2013 | 2 005 688 000 | 15.83% | 881 369 800 | 27.75% | 652 687 800 | 9.77% |
| 2014 | 1 887 095 200 | -5.90% | 863 868 600 | -1.98% | 630 946 500 | -3.33% |
| 2015 | 1 890 743 400 | 0,20% | 826 669 200 | -4.30% | 608 090 000 | -3.62% |
FANAF insurance market: a binding regulatory framework
Several countries in the region have recently undertaken reforms of the regulatory framework that governs the insurance business. The Inter-African Conference on Insurance Markets (CIMA), the hard core of the FANAF zone, has initiated numerous reforms. In April 2016, it imposed new requirements regarding minimum share capital. Insurance companies are therefore left with a three-year period to raise minimum share capital from 1 billion FCFA (1.6 million USD) to 3 billion FCFA (5 million USD) and a five-year period to raise it to 5 billion FCFA (8.3 million USD).
According to the survey entitled “Special 2015 FANAF figures”, analyzing the data of 159 companies operating within the CIMA zone, nearly 85% of the companies are required to proceed with increases of their capital in order to attain the first level of 3 billion FCFA (5 million USD). A minimum global amount of 199.4 billion FCFA (332 million USD) in capital must be injected in the companies by the next three years. The passage within five years of the minimum capital of 3 to 5 billion FCFA (5 to 8.3 million USD) requires an additional fund-raising of 278 billion FCFA (465 million USD). Overall, and on the basis of the 2015 figures, nearly 800 million USD will be needed by insurance companies of the CIMA zone in order to comply with the minimum share capital of 5 billion FCFA (8.3 million USD).
Minimum share capital: funding requirements per country within 3 and 5 years
in USD| Number of companies | Number of companies under review | Capital requirements within 3 years | Capital requirements within 5 years | |
|---|---|---|---|---|
Benin | 14 | 11 | 25 421 794 | 61 573 994 |
Burkina Faso | 15 | 15 | 46 206 210 | 96 186 210 |
Cameroon | 24 | 24 | 40 348 537 | 101 630 055 |
Central African Republic | 2 | 2 | 6 664 000 | 13 328 000 |
Congo | 7 | 6 | 11 517 208 | 29 843 208 |
Côte d’Ivoire | 27 | 26 | 45 945 664 | 129 262 814 |
Gabon | 9 | 8 | 14 147 672 | 35 271 886 |
Equatorial Guinea | 2 | 2 | 4 664 800 | 11 328 800 |
Mali | 11 | 9 | 23 324 000 | 52 672 426 |
Niger | 8 | 8 | 23 952 075 | 50 608 075 |
Senegal | 25 | 24 | 50 283 148 | 126 416 512 |
Chad | 3 | 3 | 9 163 000 | 19 159 000 |
Togo | 12 | 12 | 30 571 100 | 69 722 100 |
Total | 159 | 150 | 332 209 210 | 797 003 081 |
