Juin 2017 Volume 031 2017 Volume Juin Le R é assureur Africain - Juin 2017 assureur Africain NOUVELLES DES REGIONS DES NOUVELLES PRESENTATION DE MARCHE DE PRESENTATION ASSURANCE ET REASSURANCE ET ASSURANCE EDITORIAL THE AFRICAN REINSURER A PUBLICATION OF THE AFRICAN REINSURANCE CORPORATION PUBLICATION DE LA SOCIETE AFRICAINE DE REASSURANCE DE AFRICAINE SOCIETE LA DE PUBLICATION LE REASSUREUR AFRICAIN REASSUREUR LE EDITORIAL INSURANCE & REINSURANCE MARKET PRESENTATION NEWS FROM THE REGIONS The African Reinsurer - June 2017 Reinsurer The African June 2017 Volume 031 THE AFRICAN REINSURER African Reinsurance Corporation Société Africaine de Réassurance A PUBLICATION OF THE AFRICAN REINSURANCE CORPORATION African Reinsurance Corporation Société Africaine de Réassurance Headquarters/Siège: Plot 1679, Karimu Kotun St., Victoria Island, P.M.B. 12765, Lagos, NIGERIA Tel: (234-1) 4616820-8, 2800924-5 Telefax: (234-1)2800074 E-mail: [email protected] - Web site: http://www.africa-re.com - Your Reinsurer - Votre Réassureur - An ally within your reach - Un Interlocuteur de proximité - A Partner you can trust - Un Partenaire de confiance - A Strong Security With A- Rating - Un réassureur fiable (S & P and A.M. 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Plot No. 1149 Gerad Mall, 6th Floor, Suite Number 432 Africa Re Place Masaken Sheraton, Heliopolis Debrezeit Road, Beklobet, Kirkos Sub City, 10 Sherbourne Road Postal Code: 11361 Kebele 05 Parktown 2193, Cairo, Egypt P O Box 1055 Johannesburg, Tel: (202) 22685668 ADDIS ABABA Tel: (27 -11) 484 -3764 Fax: (202) 22685667 Ethiopia DL: (27 -11) 351 9598 E.mail: [email protected] Office Tel: +251 11 416 5803/4 Fax: (27 -11) 484 - 1001 Mobile: +251 922122473 E.mail: [email protected] Email: [email protected] 1 African Reinsurance Corporation Société Africaine de Réassurance CONTENTS 31st Edition, June 2017 Launched in 1987 THE AFRICAN 3 EDITORIAL REINSURER INSURANCE AND REINSURANCE PUBLISHER African Reinsurance Corporation 4 Technology and insurance: building resilient agriculture in Africa Plot 1679, Karimu Kotun St., V/Island P.M.B.12765, Lagos, Nigeria By: Tel: (234 1) 4616820-8, 2800924-5 - Fatou ASSAH, GIIF Programme Manager, World Bank Telefax: (234 1) 2800074 E-mail: [email protected] - Denis Chemiller-GENDREAU, President of FINACTU - Tanguy TOUFFUT, Director of Parametric Insurance, AXA EDITORIAL BOARD - Assia SIDIBE, Development Specialist for French-speaking African Countries, African Risk Capacity EDITOR-IN-CHIEF Corneille KAREKEZI 10 Impact of new regulations on the development of insurance in the CIMA zone MEMBERS By Adama NDIAYE, President of the Federation of African National Séré Mady KABA Insurance Companies (FANAF) Roger Bong BEKONDO Eric TALA Duncan Mukonyi 16 The state of aviation insurance in Africa: are our skies safe? Victor E. IGIAMOH By Adewale ADEWUSI, Assistant Director, Retrocession, Research, TRANSLATORS Statistics and Development, Africa Re Roger BONG BEKONDO Alexandre Noé PENDA MARKET PRESENTATION Eric TALA Stephen AYUKOSOK 21 The insurance market of Angola By Israel MUCHENA, Assistant Director Technical Operations, CONSULTANT Mauritius Regional Office, Africa Re Kasali SALAMI 25 NEWS FROM THE REGIONS All rights reserved. No part of this publication may be reproduced without the Publisher’s permission 2 EDITORIAL Corneille KAREKEZI Editor-in-Chief The 31st African Reinsurer contains has initiated a number of regulatory insurance industry which insures at fascinating articles on aviation reforms to deepen the market and least 90% of African aviation risks, insurance, agriculture insurance and the reinforce its credibility, which entails is awash with excess capital. This impact of new insurance regulations in greater transparency in financial has continued to depress premium the CIMA zone. disclosure, especially the introduction of rates, thus contributing to the low periodic accounting, whistle blowing by levels of premium recorded by the The article on building resilient auditors and supervision of real estate industry, which impacts the limited agriculture in Africa through technology experts. The write-up on the effect of African insurance market. It is however and insurance examines innovative new regulations on the development expected that in the near future, risk management and insurance, of insurance in the CIMA zone clearly premium rates would firm up if the challenges and opportunities in shows that the different measures will gradual exit of funds from the aviation agriculture insurance in the face of certainly have a very significant impact sector to more lucrative sectors climate change. It gives examples of on the organization of companies, continues. agriculture insurance and looks at new relationship between insurers and technologies and innovative solutions policyholders, profile and development Before presenting news from the emerging in Africa. One of the biggest of the insurance sector. The reforms different regions of the continent, the challenges today, is how to make will strengthen the financial position 31st African Reinsurer presents the vulnerable farmers more resilient to of companies and reduce the number Angolan insurance market. natural disasters. Therefore, affordable of players to a few that are capable of and accessible agriculture insurance providing services comparable to those schemes will help farmers recover of insurers in more developed markets. rapidly from natural disasters and come one step closer to escaping the poverty The African aviation industry remains trap. a challenging market for a plethora of reasons namely, investment, health In order to reverse the trend of low & safety, international standards, insurance penetration, the CIMA zone training and education. The global 3 Issue 31 June 2017 The African Reinsurer INSURANCE & REINSURANCE Technology and insurance: building resilient agriculture in Africa 1.0 Introduction By: Agriculture remains the mainstay and driving force of livelihoods and economies of most African countries, in spite of the fact that it is a highly weather-sensitive sector which is prone to natural disasters. On average, economic losses from natural disasters total more than US$300 billion a year1. Although this number fails to detail the extent to which specific regions, sectors and livelihoods are affected, it is Fatou ASSAH Tanguy TOUFFUT believed that agriculture, which GIIF Programme Manager, World Bank Director of Parametric Insurance, AXA is largely made up of smallholder farmers (80%) working on up to 10 hectares2, is impacted to a rather significant extent. A loss affecting a smallholder farmer will impact his or her wellbeing more adversely than his wealthier counterpart, and repeated disasters are in fact keeping smallholder farmers in poverty. The challenge today lies in how to make these vulnerable farmers more resilient to natural disasters. This paper aims at answering this question by examining one Denis Chemiller- Assia SIDIBE piece of the puzzle: innovative GENDREAU Development Specialist for French- risk management and insurance approaches. By way of contributions President of FINACTU speaking African Countries, African Risk Capacity from experts from the World Bank, FINACTU Group, AXA and the African Risk Capacity (ARC), the article provides a wide range of insights on the topic. It examines the challenges and opportunities 1 United Nations Global Assessment Report on Disaster Risk Reduction, 2015 2 Food and Agriculture Organization of the United Nations, 2012 4 INSURANCE & REINSURANCE in agricultural insurance in Africa adverse impact on education, example of the crucial role index in the face of climate change. The health, savings and investment. insurance plays in protecting food paper then provides examples of security is the positive impact agricultural insurance as practised 2.1.2 How the World Bank helps of the livestock index project in a few African countries. Finally, farmers to be more resilient initiated by Dr Andrew Mude of the it looks at new technologies and Funded by the European International Livestock Research innovative solutions emerging Commission, ACP Group of States, Institute (ILRI), the recipient of the on the continent that are likely the Netherlands and Japan, the 2016 Norman Borlaug Award for contribute to the pool of knowledge World Bank’s Global Index Insurance Field