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The partnerships being considered are with technology and telecoms companies, as well as post offices, with whom profits would be shared, Coulibaly says. WTW plans to distribute life and non-life policies, which will include medical insurance. The policies will cover illnesses such as malaria, which in West Africa kills more people than Covid-19 or AIDS.
The west and central Africa region managed by Coulibaly comprises Côte d’Ivoire, Ghana, Senegal, Cameroon, Republic of Congo and Nigeria. WTW, which trades on Nasdaq in the US, is designing products for the region for approval and use by its insurance partners, which include Axa, Allianz, Sanlam and NSIA. Using partners with new technology to distribute policies is “the fastest way to reach out to the population,” Coulibaly says. A pilot scheme is planned to start in Côte d’Ivoire by the end of the second quarter of 2023.
The main driver of economic growth in the region is still states rather than the private sector, he says. Growth prospects are strongest in states with the most capacity to invest, such as Côte d’Ivoire and Senegal, where oil industry growth is underpinning WTW’s business. The company is also doing well in Nigeria and Ghana, due to investment in oil, gas and mining.
- Cameroon, the company’s second-largest market in the region, is currently “struggling” while the Republic of Congo is the “worst” of the markets for which Coulibaly is responsible.
- He expects that currently subdued insurance policy growth rates in both countries will recover.
WTW, formed by a merger between Towers Watson and Willis Group in 2016, cut back its presence in the region from 22 countries to six in 2018. While the company is on the lookout for strong economies in which it can invest, there are no plans to alter current geographic exposure. “We are where we want to be,” Coulibaly says.
Life insurance penetration in the region, he says, has been growing steadily over the last 10 years, and faster than for non-life policies. But growth is still held back by “very low awareness” of products and a “lack of trust” which some players in the market have failed to rectify.
The biggest obstacle, he argues, is one that could be fixed with relative ease. National regulations on insurance require premiums to be paid before cover comes into force. That makes it hard for people without bank accounts to start policies, with cash payments, even if they could be collected in a cost-effective way, not allowed. “That has always been an obstacle.”
- More flexible rules are needed to allow people without bank accounts to pay, Coulibaly says.
- “The insurance market will grow thanks to technology” such as mobile money, with Covid-19 having taught many people about how to pay for goods and services online.
- “The market is ready for deep use of technology and digital channels.”
Loosening the rules on insurance payment methods would help to decouple life insurance from its reliance on the extent of formal banking penetration.
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