West Africa:A tale of 3 insurance markets

Côte d'Ivoire collected FCFA594.8bn ($1.03bn) in insurance premiums in 2023, compared to Cameroon's FCFA270.6bn and Senegal's FCFA268.6bn,according to the latest available figures from the Federation of African National Insurance Companies (FANAF).

Cameroon and Senegal represent dynamic but structurally constrained markets, reported the news website Le 360 Afrique. While their individual market share was around 13% in the FANAF zone, reflecting solid growth, it was insufficient to compete with Côte d'Ivoire.

Fragmented markets

One of the major obstacles faced in Cameroon and Senegal lies in the fragmentation of their insurance ecosystems. Unlike the Ivorian market, which is dominated by a dozen major players with diversified and synergistic offerings, the Cameroonian and Senegalese sectors are fragmented with multiple small companies. This dispersion hinders economies of scale, limits investment in innovation, and reduces the ability to offer competitive products on a large scale.

Furthermore, their regulatory framework, although formally robust, suffers from disparate enforcement and bureaucracy that slows down the approval or launch processes for new products. Finally, excessive dependence on non-life insurance (75% of premiums in Senegal) exposes these countries to economic uncertainties, unlike the Ivorian market that balances its revenues between life (42%) and non-life (58%), thus strengthening its resilience.

Côte d'Ivoire

Côte d'Ivoire's insurance market is anchored on an integrated insurance ecosystem. Firstly, the country relies on proactive regulation embodied by the Regional Insurance Supervisory Commission (CRCA), which guarantees rigorous and transparent supervision.

Secondly, innovation and digitalisation have propelled the local market: a pioneer in microinsurance and e-insurance platforms, Côte d'Ivoire has been able to attract a young and informal clientele, with 20% of life premiums generated via digital channels in 2023, compared to less than 5% in Cameroon.

Thirdly, Abidjan, the largest Ivorian city, is home to the headquarters of regional giants such as NSIA and Sunu Assurances, whose pan-African networks and synergies with the banking sector and FinTechs are continually expanding their customer base.

Fourthly, Côte d'Ivoire has made insurance inclusion a pillar of development, through low-cost products adapted to modest incomes and public-private partnerships extended to rural areas.

Côte d'Ivoire vs Cameroon vs Senegal