Risk management profession matures in Francophone Africa

Risk management and the insurance market are set for rapid growth in French-speaking Africa as economic development and the rise of the middle class create a new range of opportunities for global companies, according to a leading insurer in the region.

Alioune Diouf, the CEO of AXA Senegal, told Commercial Risk Africa that investments in infrastructure and other areas are already pushing the demand for insurance coverages in the countries that compose the Conférence Interafricaine des Marchés d’Assurances (CIMA), a common insurance market.

“Companies are increasingly looking for protection, and as result I believe that the job of insurance brokers and, at the level of corporations, of risk managers will see a favourable evolution in the future,” Mr Diouf told CRA.


Demand for commercial insurance is growing because of the economic development that some of the economies in French-speaking Africa have enjoyed of late.

In countries such as oil and bauxite-rich Ghana, the insurance market has grown at annual rates of 15% to 20%. The pace has also been impressive in Cameroon and the Ivory Coast, Mr Diouf said.

“There are important natural riches in the region, and African politicians have been ever keener to process those riches inside their countries,” he pointed out.

He mentioned the example of Gabon, which has decided that it will not allow its wood to be exported in natura, and that companies have to industrialise within the Gabonese frontiers.

“In order to make that possible, large infrastructure projects are being implemented,” Mr Diouf pointed out. “Dams, airports, ports and roads are being built, and all of that is creating a demand for insurance,” he added.

The CIMA region is composed of 14 countries where French is a national language and where laws are very much inspired by the Napoleonic Code. Insurance regulation, therefore, largely mirrors that of France, the former colonial power.

Mr Diouf remarked that the market is dominated mainly by motor and health insurance lines, and it is ruled by a common legal framework that is shared by all the countries. Each country has a national insurance entity, but Comission Régional du Contrôle des Assurances, CRCA, is the highest supervisory body for all of them.

Mr Diouf pointed out that the common market creates a positive environment for insurers that operate in the region.

For instance, he said that AXA has found many synergy opportunities in the subsidiaries it maintains in Senegal, the Ivory Coast, Gabon and Cameroon, the four countries of the CIMA region where it currently operates.

For international groups that own subsidiaries in several CIMA countries, the common market is also helpful, he said, as it makes it easier for them to manage their insurance arrangements.

As legislation is the same in all countries, and there are a number of pan-regional insurance groups, companies are able to negotiate the purchase of insurance in blocs.

From an international programme point of view, it is important to note that CIMA countries are non-admitted jurisdictions.

Mr Diouf said that, as a rule, companies that operate in the region and that want to transfer risks located there must place the risks in CIMA countries too.

Exceptions can sometimes be made, but they must be approved on a case-by-case basis by the authorities.

When it comes to large risks, it is possible to take them to international reinsurance markets, although at least 25% of the risks must stay in the region.

The law also stipulates that the operation must go through a company based in the CIMA market.

“What the large international companies do is negotiate directly with reinsurance markets via their captives or brokers,” Mr Diouf said. “So it is not difficult to integrate the countries of the region in international programmes,” he added.

Companies should also bear in mind that some coverages are mandatory, such as motor insurance in almost all countries, and insurance to import products in several of the countries.

In some countries construction insurance is mandatory too, or will soon become so. The obligation includes coverages such as all risks construction and ten-year civil liability (decennial coverage). Mr Diouf also said that ever more companies are purchasing health insurance for their workers.

On the other hand, property insurance is not a major concern, at least from a catastrophic point of view. “We do not have many catastrophic risks in this region,” Mr Diouf pointed out.

“Those who purchase property damage insurance are more worried about risks like fire or explosions, or losses caused by strikes or popular movements. Floods here are very rare, and the same goes for earthquakes.” However, it is not possible to purchase insurance against damages caused during an armed conflict, the CEO of AXA Senegal told CRA.

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