CIMA’s non-life insurance market

Magazine Issue:

Magazine date:

Jul 2022

CIMA The volume of non-life insurance premiums grew from 531 billion FCFA (1.025 billion USD) in 2011 to 885 billion FCFA (1.656 billion USD) in 2020, an increase of 67% over the period. The three main markets of the CIMA zone alone, Côte d'Ivoire, Cameroon and Senegal, account for 57% of non-life premiums.

Over the past ten years, Burkina Faso has posted the strongest growth in non-life premiums (+137%), followed by Côte d'Ivoire (+117%) and Mali (+93%).

Read also | CIMA zone insurance market [4]

CIMA’s non-life insurance premiums per country

In millions USD

	2011	2015	2020	2011/2020 evolution ⁽¹⁾	2020 shares
Côte d'Ivoire	204	272	429	117%	26%
Cameroon	204	218	263	33%	16%
Senegal	137	144	249	88%	15%
Burkina Faso	149	169	153	6%	9%
Gabon	50	65	116	137%	7%
Togo	68	150	100	51%	6%
Benin	42	47	79	93%	5%
Congo Brazzaville	45	48	71	65%	4%
Mali	48	54	68	46%	4%
Niger	33	40	54	65%	3%
Equatorial Guinea	23	26	37	68%	2%
Chad	15	22	24	64%	1%
Central African Republic	7	5	11	61%	1%
Guinea Bissau	-	-	2	-	0%
Total	1 025	1 260	1 656	67%	100%

⁽¹⁾ Evolution in FCFA

CIMA’s non-life premiums per class of business

As in most African countries, motor insurance is predominant in the CIMA region, accounting for 31% of non-life premiums, followed by bodily injury and health insurance (27.5%) and fire and other property damage (17.5%).

In terms of growth, with the exception of non-life acceptances, where production remains marginal, and marine (14%), motor insurance is one of the schemes that have grown the least over the last ten years (+48%).

Conversely, the fastest growing classes of business over the last ten years have been general third-party liability (+157%), bodily injury & health (108%) and fire & other property damage (85%).

In millions USD

Classes of business	>Bodily injury & health	Motor	Fire & other property damage	General third party liability	Marine	Other risks	Non-life acceptances	Total non-life
2020	455	515	289	103	156	115	23	1 656
2019	408	464	252	88	150	87	18	1 467
2018	371	468	258	58	138	74	17	1 384
2017	364	475	263	52	144	72	13	1 383
2016	290	409	187	46	131	150	17	1 230
2015	282	408	197	50	157	141	25	1 260
2014	284	423	186	47	154	108	39	1 241
2013	311	461	204	53	181	131	37	1 378
2012	258	404	171	44	165	110	25	1 177
2011	226	360	161	41	141	72	24	1 025
2020 shares	27.49%	31.12%	17.46%	6.22%	9.43%	6.95%	1.33%	100%
2011-2020 evolution ⁽¹⁾	108%	48%	85%	157%	14%	65%	-6%	67%

⁽¹⁾ Evolution in FCFA

CIMA’s non-life loss experience

Expressed in local currency, the non-life claims cost has increased by 94% from 2011 to 2020 while at the same time the non-life premium volume has increased by only 67%. This trend in premium and loss ratios indicates a deterioration in the underwriting balance, which is expressed by a 4.5-point loss in the loss ratio.

The loss ratio in the CIMA zone, which rarely exceeds 50%, is significantly lower than that reported in developed countries and in the rest of Africa.

In terms of claims experience, the weakness of the CIMA zone lies not in its claims ratio but in the slowness of settlement periods. This slowness was behind the establishment of CIMA, one of whose priorities is to clean up claims outstanding settlements. The reforms introduced by the CRCA have reduced the average time to pay a claim from 2.27 years in 2011 to 1.52 years in 2020 for non-life insurance.

CIMA’s non-life loss ratio

As mentioned earlier, the claims experience remains moderate in the CIMA zone, with little exposure to natural catastrophes. The average loss ratio is 43.1% in 2020. It was 37.2% ten years earlier. Only two countries in the zone have a loss ratio above 50% in 2020: Senegal (52.7%) and Côte d'Ivoire (51.4%).

In millions USD

	Non-life incurred losses	Non-life earned premiums	Loss ratio
2020	708	1 641	43.10%
2019	628	1 455	43.20%
2018	570	1 370	41.70%
2017	570	1 360	41.90%
2016	465	1 199	38.80%
2015	508	1 234	41.20%
2014	552	1 278	43.20%
2013	564	1 358	41.60%
2012	428	1 160	36.90%
2011	376	1 012	37.20%

CIMA’s non-life management expenses

Management costs are the major downside of French-speaking West and Central Africa. Thanks to CIMA's efforts, these costs (overheads and commissions) have gradually declined from 2011 to the present. From 40% in 2011, they fell down to 37% in 2020, a decline of 8% in ten years. The top two countries in the zone in 2020, Côte d'Ivoire and Senegal, are among those that have been most successful in reducing this rate, from 45% to 36% and from 42.5% to 37.2% respectively between 2011 and 2020.

Despite their improvement, management expense ratios in the CIMA zone remain significantly higher than those posted in other markets.

CIMA’s management expenses ratio

In millions USD

	Commissions	overhead expenses	Total non-life management expenses	Non-life written premiums	Management expenses ratio
2020	217	397	615	1 655	37.10%
2019	197	363	560	1 467	38.20%
2018	191	358	549	1 384	39.70%
2017	186	362	548	1 383	39.60%
2016	160	311	471	1 230	38.30%
2015	159	300	458	1 260	36.40%
2014	165	323	488	1 241	39.30%
2013	170	339	510	1 378	37.00%
2012	147	303	450	1 177	38.20%
2011	130	284	414	1 025	40.30%

CIMA’s non-life combined ratio

Thanks to a relatively low claims experience, CIMA countries have managed to keep the combined ratio within a range of 75% to 82% over the past ten years, resulting in a comfortable technical margin.

Over the last five years, from 2016 to 2020, the combined ratio has not exceeded 81.5%, with Senegal (89.9%), Côte d'Ivoire (87.4%) and Benin (87.5%) showcasing the highest combined ratios in 2020.

In million USD

	Loss ratio	Management expenses ratio	Combined ratio
2020	43.10%	37.10%	80.20%
2019	43.20%	38.20%	81.40%
2018	41.70%	39.70%	81.40%
2017	41.90%	39.60%	81.50%
2016	38.80%	38.30%	77.10%
2015	41.20%	36.40%	77.60%
2014	43.20%	39.30%	82.50%
2013	41.60%	37.00%	78.60%
2012	36.90%	38.20%	75.10%
2011	37.20%	40.30%	77.50%

Read also | CIMA’s life insurance market [8]