The demand for insurance in Africa is on the up and African insurance markets continue to attract global interest. Countries in the Sub-Saharan Africa region in general, and Cote d'Ivoire in particular, continue to implement reforms aimed at boosting the local business environment. According to World Bank's "Doing Business 2014" report, Cote d'Ivoire is among the 10 global economies that improved their business regulation the most. Cote d'Ivoire also made the biggest progress globally in terms of commercial contracts enforcement.
Government securities continue to dominate the capital markets. Most of government issued bonds have short maturities, which creates higher roll-over risks due to frequent debt financing. Lack of deep domestic bond market and shortage of long term maturities has an adverse effect on investment by foreign institutional investors.
Earlier this year Cote d'Ivoire indicated that it would issue around $1bn in sovereign debt on the international market this year in dollar Eurobonds and local CFA franc denominated securities.
Against this backdrop, considerable challenges remain. The Ivorian financial industry is shallow and private sector credit represents less than 20% of GDP, consisting mainly of short-term loans. The insurance industry is the largest in the region and highly concentrated.
Life insurance is the main driver in the domestic insurance, which grew at 3.9% CAGR in terms of written premium value during the years 2009 to 2013. Life insurance alone grew at 6% CAGR in the same period.
Cote d'Ivoire's economic indicators for 2013 may indicate the shape of things to come. Exports remain strong and real GDP growth reached 8.7%, driven mainly by a surge in domestic demand. Average annual inflation remained moderate at 2.6%, while the overall fiscal position has seen an improvement. Foreign direct investment inflows and project loans augmented the slightly increasing external current account deficit.
Cote d'Ivoire allows 100% foreign direct investment in the insurance industry. As a result of foreign companies entering the market the domestic insurance industry increased competitiveness. The key players in the Ivorian insurance industry include Beneficial Life (Côte d'Ivoire), Groupe NSIA (New Inter-Insurance Company), Atlantique Assurance Côte d'Ivoire, and Axa Assurance.
Prospects for the rest of this year remain optimistic with IMF forecasting that fiscal deficit will remain at 2.3% and average annual inflation will reduce to 1.2%.
According to industry analysts the Ivorian insurance market is expected to see growth of 4.5% CAGR in the years leading to 2018.
For more information on the Cote d'Ivoire Insurance Market, see the latest research: Cote d'Ivoire Insurance Market
Source Companies and Markets.com
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