Insurance: English-speaking countries are the most promising – Dione
The Franco-Senegalese businessman created Sunu Assurances following the acquisition of the life insurance subsidiaries of French group Axa from Dakar to Douala, between 1999 and 2004.
Sunu now employs more than 1,100 people in 11 countries. Its turnover has grown from 16bn CFA francs in 1999 to 90bn CFA francs in 2012, with profits of between 2bn and 4bn CFA francs in the past few years.
Working with his son Karim and Joël Amoussou, Dione has been a frontline observer of insurance-sector development south of the Sahara for the past 30 years.
Within the next five years, we will set up operations in an Anglophone country
The Africa Report: Saham, one of your main competitors, has raised several hundred million euros to speed up its development. That is far from being your case. Why?
Pathé Dione: Saham raised this money to buy Colina and to make acquisitions in new countries. In our group’s early stages, we took over Axa’s subsidiaries. We have preferred to create subsidiaries ever since, as we have done in Guinea and Mali these past few years. We’ve also recently been granted an accreditation for life insurance services in Burkina Faso. It is cheaper and our debt remains low.
Why not consider buying out competitors?
We sometimes make acquisitions, but it only involves companies that we are well acquainted with. In Senegal, we have just acquired the Compagnie Générale d’Assurances, for whom we had already provided technical assistance. However, [acquisitions are] a very difficult task and you may sometimes be in for unpleasant surprises. We prefer managing our own growth this way.
What are your priorities?
Now that we have a good coverage of Francophone areas, we want to expand further to the Anglophone zone – Nigeria, Kenya and Tanzania – through the creation of subsidiaries. English-speaking countries are the most promising markets. For instance, insurance is developing rapidly in Zimbabwe.
Are you going to expand into this area in 2014?
No. Our foremost concern is to consolidate our gains. It is not about planting our flag everywhere. If we decide to go to Nigeria, we need to prepare ourselves seriously with teams who have ample knowledge of the local market. Within the next five years, we will set up operations in an Anglophone country. Lastly, we also look forward to market liberalisation in the Democratic Republic of Congo.
What about micro-insurance?
We have recently created KAJAS, a microfinance establishment in Senegal. We are using it as a pilot. If the results prove satisfactory, we will offer services to go along with loans or provide other health- related services to people who have restricted access to healthcare.
Will you start insurance services via mobile phone?
We are testing it with Orange in Côte d’Ivoire and with Tigo in Senegal. It’s a way of reaching populations in remote areas. Once contracts are signed, insurers often have difficulty collecting payments because a section of the population does not have a bank account. Payment via mobile phones will therefore secure transactions.
Are there too many players involved in the market?
There are too many small companies, which are often mismanaged. The capital increase from 500m ($1m) to 1bn CFA francs has failed to compel small companies to merge. A shift to 2bn CFA francs is being discussed. However, [the minimum capital requirement] remains much higher [in Senegal] than in other countries, like Ghana or Nigeria. ●