Solidarité Africaine d'Assurances: Insurance Services in Côte d'Ivoire

Interview with Faman Toure, CEO of SAFA (Solidarité Africaine d'Assurances

What are the specificities of the insurance sector in Côte d'Ivoire? Côte d'Ivoire has been experiencing growth for 3 years now, how would you evaluate this growth?

The insurance sector is doing well although some companies have difficulties. Since the crisis’ end, the figures have improved. In the CIMA area, i.e. the Central Africa and West Africa franc zone, Côte d'Ivoire is the leading country in the field of insurance. We are leading and our current turnover in the Ivorian market is around 200 billion CFA francs. Life insurance, for example, has done an outstanding leap, given the tax benefits that were granted to life insurance. It has developed significantly, which is not the case in many countries. For property and casualty insurance, there is an increase in the market share by about 10 to 20% every year. We actually felt the crisis at the given time because when there is no business, there is no insurance. Insurance is based on business and all the insurable properties, so if these companies disappear, it is normal that our figures drop. Therefore in 2010 and 2011 we dropped a bit, but compared to the franc zone, the CIMA zone, our numbers come out as the best. Compared to the country itself, there has been a fall at the given time, but the recovery was fast thanks to all the investments and creation of new businesses and thus the figures are improving as a result.

In three years, I see that SAFA is with partners who have a certain financial capacity and who have some business too. It would allow the company to feed itself and to conquer the Ivorian market and then extend in the sub-region – all within the scope of grouping.

Let’s talk now about SAFA Assurances, is it still specialized in non-life insurance? Or do you deal with both non-life and life insurances?

SAFA insurance began timidly. It has been created in 1995. We started with 1 billion CFA francs; today it is about 2.5 billion CFA francs. We are still interested in non-life insurance. During recent years, the regulator decided that the same company can’t do both, so if you want to act in the property and casualty insurance, you have a license for it, and if you want to act in life insurance, you must have another approval for it. Moreover, there have to be two different leaders. So SAFA is dedicated to non-life insurance.

In which particular area do you appear as the strongest, the most experienced?

Myself as a professional, I have experience in all areas - this is related to my education. At SAFA, it was initially the car insurance area. I am the second CEO since the creation. Car insurance represents around 70% and the remainder stands for the other risks. Other risks are fire insurance, liability insurance, enterprise, small and medium enterprises, i.e. restoration, artisans, the formal sector, marine insurance and terrestrial transport insurance. We are also working with airfreight and health insurance: illness or injuries. All the above is in the scope of non-life insurance.

We also offer a special type of insurance: agricultural - but that is on demand only. I had the chance to start by dealing with agricultural insurance, so I have this particularity.

Today we are diversified, a little less than 100% is car insurance, and the rest is risk of transporting cash, personal accident insurance, theft insurance, water damage, etc. Because of the creation of TPV group, where even those who are not interested in public transport receive bonuses, that is to say they don’t subscribe but are benefiting through the TPV group.

Today I'm working in another interesting area, which is the school liability insurance, the school insurance for students of secondary schools, technical, etc. There is a satisfaction at this level today.

What is the market that will be evolving in Côte d'Ivoire? What kind of insurance will grow in your opinion? 

The types of insurance I just mentioned are classical. There is now a field that is being developed and it is the credit insurance. In the past, those companies that wanted to get loans were asked to participate in tenders in the public market, etc., so they were obliged to bring guarantees. Instead of seeking a bank guarantee, they use the insurance guarantee, so-called credit bail.

Life insurance is really starting to grow here but this is a small percentage. If you take the figures throughout Africa, life insurance grows really timidly. We must go to the people and convince them, and it is often not easy to do so in rural areas and most often they do not understand well.

So we developed the complementary pension insurance on our market, where there has been a boost from our authorities by allowing tax exemption; precisely at this level, the tax rate is very low. This led to a boom and all companies today propose this type of insurance to their employees. It's really a boom on the Ivorian market. Thus it tends to an equilibrium non-life insurance and life insurance.

What are the reasons that allow you to attract foreign investors?

It is not a secret since it was on Echo Finances when in 2012 we signed an agreement with WAFA Insurance, based in Morocco. They were interested in our company for different reasons. First, they did not want a large company, they wanted a company that needed support that they could provide and show that it is possible to be a leader with almost nothing. Our company is young and not very large. They needed this kind of a company to prove that they have the skills and know-how, etc. Secondly, their audits showed that we are a healthy company that can actually be interesting and break through the Ivorian market and the market for CIMA. So they wanted to be leader in Côte d'Ivoire and extend over all the countries of the franc zone in the development of the insurance business. But they were convinced to start with a small business, this is what motivated them. Our turnover of 2.5 billion CFA francs seemed a good opportunity to them. Their audits have shown that with limited resources, we are a business that could actually grow very quickly. The diagnosis clearly showed that we had the competences but we only needed the means.

What can actually interest other investors is that we have a regulatory authority that puts pressure so that our companies are healthy and thus can play the role of a reliable insurance company.

You've already gone through a phase where you have almost signed a partnership with a major international insurance, so you are already familiar with that and you have already passed all the necessary steps. All you have to do is attract investors, interest them, and discuss. But all the steps, the technical part, the reorganizational part, have already been done. What can you say to attract potential investors in relation to the market and to your company?

All of our businesses in Africa go through a learning process. Even African companies in our zone today, they used to be small businesses that tried to group together. This is the trend. Alone, it will be difficult. The competition is tough because the market is open, so there are European companies, American companies, South African companies and others. Today the trend is regrouping. We talked earlier about the fact that there have been others who have already tried investing in SAFA and it gave us some experience. We went very far since we went to the Regional Committee who gave a favorable opinion. So that means that all steps had been made and there have been also a favorable opinion of the guardianship: the Ministry of Economy and Finance. All these files have been sent to Morocco for the Moroccan authorities to give the approval to WAFA. We passed a number of steps and what remains now are just formalities for investors.

What we can say to prospective investors is that SAFA needs experienced investors, referral partners in financial management, as today we are dealing with insurance that is associated to banks. Whatever the quality of your management is, what is really important is financial capacity and solvency in order not to be in trouble. So you must be with companies that can help you recover, because insurance may at anytime have imbalances. In case of major loss for example evaluated to billions of CFA francs, even though there are reinsurers, you can be unbalanced in relation to your management. So when you have an interesting financial standing, it gives you the means to sell your product relative to the competition, and to think in order to deal with the hint of competition. An interesting financial standing also allows you to reassure your clients, because insurance is confidence. If you don’t reassure, whatever you speech is, it will be difficult. It is through these partnerships, these investors that will come that we can have some strength to go towards quality. Quality allows you to have a certification and it is easier to convince an interlocutor when we are certified. Your insurer may criticize you in relation to some form of management, but they have a guarantee that this is a business that they can trust.

What are your long-term prospects, how do you see SAFA in three years, what would be the situation if you find an investor?

In three years, I see that SAFA is with partners who have a certain financial capacity and who have some business too. It would allow the company to feed itself and to conquer the Ivorian market and then extend in the sub-region – all within the scope of grouping.

I also see SAFA present in other markets; we can extend ourselves, because the law is evolving in the direction of having a single approval with respect to our zone. So we can be here and have a company or a partnership in Burkina Faso since it is the same regulation, it is the same code that applies to all these countries. We are required in our businesses today to have a service, even a direction, relative to money laundering - as a matter of transparency and to allow that we can have one approval and go to Burkina Faso and Mali...

We will grow in Côte d'Ivoire and if another company wants to build a partnership with us, we are ready to follow and to have new relations in the sub region through these regroupings. That's really our vocation and that is what is being developed.

Today, groups such as AXA and others are returning to Africa while at some point in the past they tended to go elsewhere. These groups come back stronger and therefore we must be ready at all levels: in terms of human resources, in terms of technology, as we must be technically up to date and ready to meet the client’s expectations. So our perspective is first to be strong in Côte d'Ivoire and then to expand into the sub-region.

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