Transcript Benin

TOUR OF WEST AFRICA
DEVELOPMENTS IN LIFE INSURANCE
BUSINESS IN WEST AFRICA
presented by : ATSU
MENYAWOVOR, GHANA
NOVEMBER 11, 2010
WEST AFRICA
WEST AFRICA
West Africa is composed of 18 countries
•
Stretches from Cape Verde in the Western part of the Continent to
Chad
•
It covers a surface area of 7,800,000km square
•
Its surface is equivalent to 2.5 times that of the European Union
•
It is approximately 85% of Canada or the United States
•
West Africa is made up of the following countries
•
Benin | Burkina Faso | Cameroon | Cape Verde | Chad | Côte
d'Ivoire | The Gambia | Ghana | Guinea | Guinea-Bissau | Mali |
Mauritania | Niger | Nigeria | Liberia | Senegal | Sierra Leone |
Togo
Population is growing rapidly, from 315 million in 2007, it is projected
to reach 650 to 700 million by 2050.
The population is mostly young, (60% are under 25 years) and will remain
so until 2050.
WEST AFRICA
•
•
•
•
West Africa remains one of the poorest and most vulnerable regions
in the world
With exception of Cameroon, Cape Verde, Cote d’ Ivoire, Ghana and
Nigeria majority of countries in the region are classified as “Least
Developed Countries.”
Nigeria which has over 50% of the regions GDP is considered the
region’s economic power.
Despite decades of crises and conflict, much has changed and
considerable progress is being made in democratic governance and
decentralisation
The Major Economic Zones
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•
•
Gulf of Guinea Countries
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Ghana
Nigeria
•
Cote d’ Ivoire
Cameroon
•
Togo
•
Benin
Considered the heart of the region’s economy and accounts for 80% of its GDP.
Atlantic Front
•
Senegal
Liberia
•
Guinea Conakry
•
Sierra Leone
High natural resource potential (Oil, diamond & other mineral resources) but ……
Landlocked Countries
•
Mali
Burkina Faso
•
Niger
Chad
Has numerous challenges, landlocked, huge land mass ,low population density and
major ecological constraints.
LINGUISTIC GROUPINGS
•
ANGLOPHONE
•
Ghana
•
Nigeria
•
The Gambia
•
Liberia
•
Sierra Leone
•
FRANCOPHONE
•
Senegal
•
Mali
•
Niger
•
Togo
•
Benin
Burkina Faso
Cameroon*
Chad*
Guinea Conakry
SOME SOCIO-ECONOMIC STATISTICS
- Anglophone W/Africa
COUNTRY
POPULATIO ANNUAL PER CAPITA
GDP
N
GROWTH GROWTH
(USD)
(millions)
(billions)
NIGERIA
155+
GHANA
24+
LIBERIA
3.5
SIERRA
LEONE
THE
GAMBIA
E. Guinea
6.5
2.0
0.5 million
0.56
295.00
1.8%
1.39
15.7
4.5%
0.33
0.877
1.52
2.0
2.7%
-7.8
10.45
KEY SOCIO ECONOMIC FACTORS
-Estimated to become the 8th most
populous nation by 2050
-12th largest oil producer with 10th
largest proven reserves
-Economy largely dependent on
minerals and Agric. May soon
become oil producer
-Economy dependent on Agric &
mining
Economy dependent on minerals &
agric
Economy dependent on minerals &
agric
Rich OIL resources
SOME SOCIO-ECONOMIC STATISTICS
- Francophone W/Africa
COUNTRY POPULATION ANNUAL
(MILLIONS)
GROWTH
RATE
BENIN
TOGO
COTE
D’IVOIRE
SENEGAL
CHAD
8.5
6.7
20
12
10.5
3
2.7
1.9
PER
CAPITA
GROWTH
0.63
0.022
1.42
-1.14
GDP
(USD)
KEY SOCIO-ECONOMIC
INDICATORS
6.7
Has an agro based
Economy
2.9
Has an agro based
Economy
23.1
Economy heavily
dependent on Cocoa
13.1
Economy dependent
on minerals and agric
SOME SOCIO-ECONOMIC STATISTICS
- Francophone W/Africa
COUNTRY
POPULATION ANNUAL
GROWTH
RATE
PER
GDP
CAPITA
(USD)
GROWTH
SENEGAL
12
-1.14
13.1
MALI
12+
1.86
9.0
GUINEA
(Conakry)
9.5
2.2
2.42
(2008)
3.8
(2008)
KEY SOCIOECONOMIC
INDICATORS
Economy
dependent on
minerals and agric
7th largest African
country by land
space. Economy
dependent on agric
and mining
No. of Insurance Companies
- Anglophone W/Africa
COUNTRY
LIFE
COMPANIES
NON- LIFE
COMPOSITE
TOTAL
NIGERIA
13
30
12
55
GHANA
17
23
-
40
LIBERIA
-
-
22
22
SIERRA
LEONE
-
-
8
8
THE
GAMBIA
1
10
-
11
No. of Insurance Companies
- Francophone W/Africa
COUNTRY
LIFE
NON-LIFE
COMPOSITE
TOTAL
BENIN
6
5
11
TOGO
3
7
10
COTE D’IVOIRE
11
21
32
SENEGAL
6
14
20
MALI
1
7
8
GUINEA
CONAKRY
MALI
5
1
7
10
8
NIGER
1
4
5
B. FASO
4
6
10
5
CHAD
CAMEROON
2
7
16
2
23
2008 INSURANCE PENETRATION RATE
1.8
1.6
1.4
Axis Title
1.2
1
0.8
0.6
0.4
0.2
0
Benin
LIFE
NON-LIFE
TOTAL
0.26
0.61
0.87
Burkin Camero Cote
Ghana
a Faso
on
d'Ivoire
0.19
0.37
0.86
0.32
0.46
0.67
0.7
0.92
0.65
1.04
1.56
1.24
Mali
Niger Senagal
Chad
0.1
0.38
0.48
0.11
0.48
0.59
0.07
0.25
0.32
0.41
1
1.41
Guinea Liberia
0
0
0
Sierra
The
Leone Gambia
Togo
PRODUCT TYPES
Not much has changed in our product offerings.
Apart from the introduction of Takaful Insurance in a couple of
countries including Ghana.
Our product offerings continue to be variations in Whole Life, Term Life
Endowments and universal Life policies.
The most popular variation are:
•Group Life Assurance with medical benefits,
•Mortgage Protection,
•Credit Life Policies,
•Funeral Insurance,
•Education and Retirement Plans and other Investment/Unit Linked
Policies.
REGULATORY CHANGES –
INCREASE CAPITALISATION
In recent years, there have been changes in minimum capital requirements.
•In Ghana, the National Insurance Commission has directed an increase in minimum
capital for both Life and Non-Life Companies from $1million to $5million.
The new minimum capital will come into effect in 2012.
Mergers and acquisitions eminent.
•Insurance companies of the of the CIMA area were requested to increase their
capital to 1billion FCFA as per the regulation No. 0001/CIMA/PCMA/PCE/2007.
•Liberia is hoping to raise the minimum capital to $1million and $2.5m for
composites.
•Sierra Leone is also raising the minimum paid up capital per class of business to Le
250m capitalization to Le1.2billion ($477,777.00) by December 2010.
REGULATION CHANGES – PENSION
REFORM LAWS
Pension Reform Laws have been passed in Ghana introducing a three
tier pension scheme with Life insurers eligible to participate in the
second and third tiers.
But unlike Nigeria, there is no mandatory employer arranged Group
Life policies added on to the second tier schemes.
The Ghana Pensions Act does not seem to favour Life Insurance
Companies. It restrict Life unless a Life Company is prepared to
establish a subsidiary company that will submit to a different
regulatory regime.
REGULATION CHANGES – HEALTH
INSURANCE
HEALTH INSURANCE
Ghana has various Health Insurance Schemes both Public , Private Mutual and
Private Commercial
To my mind these are entirely being managed mainly by non-insurance
professionals.
There were earlier unsuccessful attempts by two or so insurance companies in
Ghana to run health insurance schemes that ended up in financial disaster.
To my mind, it is only one insurance company that presently has a health insurance
subsidiary.
My knowledge on this subject in respect of the others in the sub region is very
limited.
REGULATION CHANGES – HEALTH
INSURANCE
HEALTH INSURANCE
Ghana has various Health Insurance Schemes both Public , Private Mutual and
Private Commercial
To my mind these are entirely being managed mainly by non-insurance
professionals.
There were earlier unsuccessful attempts by two or so insurance companies in
Ghana to run health insurance schemes that ended up in financial disaster.
To my mind, it is only one insurance company that presently has a health insurance
subsidiary.
My knowledge on this subject in respect of the others in the sub region is very
limited.
POLITICAL /ECONOMIC CHANGES
POLITICAL ENVIRONMENT
Much has happened and is happening politically.
•The region which used to be a hot spot for military adventurism is now has a
semblance of democracy. Ghana has scored high marks in the democratic enterprise.
•Also worth mentioning is the relatively uneventful elections in Cote d’ Ivoire which
is going into a second round.
•Guinea is having a difficult time but hopefully will pull through.
•Liberia and Sierra Leone are enjoying relatively stable democratic governance
•Big brother Nigeria is preparing for another democratic elections in January
•Mali I believe is working on a new constitution
POLITICAL /ECONOMIC CHANGES
ECONOMIC ENVIRONMENT
• Region enjoyed sustained economic growth and macro economic stability with yearly real
GDP averaging 5.7 between 2007 and 2008
•The pace of macro economic activity sluggish in 2009 due to volatile commodity market &
Generally tight liquidity on the back of global financial crisis.
•Economic outlook is positive as a result of regional governments commitment to
macroeconomic stability, Recovery of global commodity prices coupled with a surge in
demand for the region’s key exports and prospects of oil finds, improved governance and
greater interest from foreign partners especially China and India.
•With renewed interest in economic integration, economic prospects of the region are very
bright.
MARKET CHANGERS
WHAT MUST WE DO TO IMPROVE THE PENETRATION OF LIFE INSURANCE IN
THE REGION?
• We must seriously rebuild trust and confidence in our industry
•We must adapt our products to the needs, circumstances and aspirations of our people
•We must take advantage of available technology & deploy of robust information technology
infrastructure,.
•Improve our capital base
•Effective and Efficient legal and regulatory framework,
•Good corporate governance structure,
•discipline and orderly market, c
•Continuous human capital development, quality service delivery standard, efficient
•co-operation within the insurance industry through building stronger and effective
Associations.
THANK YOU