bancassurance in sub-saharan africa: current state and future perspectives

Bancassurance in Sub-Saharan Africa: Current State and Future Perspectives

© Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: [email protected] 1

Bancassurance Models Around the World


9th Annual Bancassurance ConferenceVienna, October 02nd – 03rd 2014

http://www.finaccord.com/

mailto:[email protected]



Agenda

The African opportunity

Macro-economic development in sub-Saharan Africa

Development of the banking and insurance sector in sub-Saharan Africa

Bancassurance in sub-Saharan Africa: regulatory environment, product range, and operating models

Future outlook






Africa is forecasted to be home of 11 of the 20 fastest growing economies by 2017

Africa possesses 30% of the world's total resources

Africa has the fastest-growing working age population in the world

Africa has the fastest-growing middle class in the world (standing at 313 million in 2013)

Africa's consumer spending is forecasted to reach USD 1.4 trillion in 2020

Source: African Development Bank, McKinsey, Standard Bank, World Bank





The African opportunityGDP based on purchasing power parity (PPP), yearly growth, 2006 to 2020 (forecast)

Source: IMF

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

2006 2008 2010 2012 2014 2016 2018 2020

European Union Sub-Saharan Africa





Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia





Macro-economic developmentGDP in current prices in sub-Saharan Africa, segmented by country, 2008, 2014, and 2020 (forecast)

Source: IMF USD billion0 100 200 300 400 500 600

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2008 As of 2014 2020 (forecast) Series4





Macro-economic developmentPPP per capita in sub-Saharan Africa, segmented by country, 2008, 2014, and 2020 (forecast)

Int. dollars0 4,000 8,000 12,000 16,000

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2008 As of 2014 2020 (forecast) Series4

Source: IMF





Macro-economic developmentTotal population in sub-Saharan Africa, segmented by country, 2008, 2014, and 2020 (forecast)

millionSource: IMF 0 50 100 150 200 250

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2008 As of 2014 2020 (forecast) a





Macro-economic developmentResidential mortgage / non-mortgage consumer lending balances in sub-Saharan Africa, 2009 to 2013

Source: Finaccord research

0

50

100

150

200

2009 2010 2011 2012 2013

Residential mortgage balances outstanding

Consumer non-mortgage balances outstanding

USD billion

France in 2013: USD 1.21 trillion (mortgage lending)

USD 331.7 billion (consumer lending)





Macro-economic developmentResidential mortgage / non-mortgage consumer lending balances in sub-Saharan Africa, 2013


0%

20%

40%

60%

80%

100%

Mortgage balances Consumer lending balances

South Africa Nine other countries in sub-Saharan Africa





Development of the banking sector Number of branches in sub-Saharan Africa, segmented by country, 2005 and 2013

0 1,000 2,000 3,000 4,000 5,000 6,000

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2005 As of 2013 Series3

Source: IMF





Development of the banking sector Number of branches per 100,000 adults in sub-Saharan Africa, segmented by country, 2013

12.7

5.0

6.1

6.0

4.0

5.5

10.3

2.6

3.0

4.7

0 5 10 15

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Brazil: 46Morocco: 22Tunisia: 17

Source: IMF





Development of the banking sector Number of deposit accounts in sub-Saharan Africa, segmented by country, 2005 to 2013

million0 10 20 30 40 50 60

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2005 As of 2013 Series3

Source: IMF





Development of the insurance sector GWP for life and non-life insurance in sub-Saharan Africa, 2009 to 2013

Source: Finaccord research, national sources

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013

Life insurance Non-life insurance tUSD billion





Development of the insurance sector Nominal and real CAGRs for life and non-life insurance, segmented by country, 2009 to 2013

-5% 0% 5% 10% 15% 20% 25% 30% 35%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Total

Nominal Real tricker






Development of the insurance sector Life and non-life insurance GWP per capita in sub-Saharan Africa, segmented by country, USD, 2013

44

20

20

35

8

11

6

4

23

0 20 40 60

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

1,060

1,028

European average in 2012: USD 1,724






Development of the insurance sector Life and non-life insurance GWP as percentage of GDP in sub-Saharan Africa, segmented by country,

2013

0.8%

1.7%

1.1%

3.4%

1.3%

0.6%

15.5%

0.9%

0.7%

1.5%

0% 5% 10% 15% 20%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

European average in 2012: 6.7%

In line with Eastern European countries






0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average

Life insurance Non-life insurance

Development of the insurance sector The relative importance of life and non-life insurance in sub-Saharan Africa, segmented by county, 2013






Development of the bancassurance marketRegulatory environment for bancassurance in sub-Saharan Africa, overview of current status

Source: Finaccord research, national regulators

Country Assessment Comment

Angola No specific restrictions

Côte d'Ivoire No specific restrictions

Ghana No specific restrictions

Kenya No specific restrictions

Mozambique No specific restrictions

Nigeria Banks not allowed to own an insurer directly

South Africa No specific restrictions

Tanzania Currently no clear regulatory framework

Uganda Banks not permitted to sell stand-alone insurance

Zambia Currently no clear regulatory framework





Development of the bancassurance marketInvolvement in bancassurance of the ten largest retail banks in each country, 2014

Source: Finaccord research 0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average

Bundled products offered Stand-alone products offered





Development of the bancassurance marketAverage number of insurance types offered by the ten largest retail banks in each country, 2014


2.3

5.5

3.2

6.1

4.9

4.2

6.1

3.4

2.3

3.2

4.1

0 2 4 6 8

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average





Development of the bancassurance marketOverall provision rates for insurance types offered by the ten largest retail banks in each country, 2014


19.0%

85.6%

13.8%

89.5%

22.0%

4.0%

64.0%

17.0%

5.0%

53.0%

10.0%

20.0%

15.0%

5.0%

19.0%

0% 20% 40% 60% 80% 100%

Accident insurance

Creditor insurance - consumer loans

Creditor insurance - credit cards

Creditor insurance - mortgages

Funeral expenses insurance

Health / hospital cash plans

Household insurance

Investment-related life insurance

Medical expenses insurance

Personal motor insurance

Retirement savings

Risk life insurance

Travel insurance

Agricultural insurance

Commercial insurance





Development of the bancassurance marketWeighted operating models for insurance offered by the ten largest retail banks in each country, 2014

0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

External underwriter Captive underwriterJV underwriter Multiple external underwritersOther Series6






Development of the bancassurance marketKey banking and insurance players in sub-Saharan Africa


Banks International groups: Barclays (Absa), Standard Chartered Pan-African groups: Ecobank, Equity Bank, FBN Bank, First

Rand Group, Standard Bank, Zenith Bank

Insurers: Barclays (Absa), Hollard, Sanlam, Standard Bank

Many Kenyan, Nigerian, and South African banks aspire to have a pan-African presence considering bancassurance as an integral part of their strategy

Only a minority of insurance companies currently have a pan-African bancassurance approach





Future outlookForecast for gross written premiums for life and non-life insurance in sub-Saharan Africa to 2020

0

20

40

60

80

100

120

2013 2020

Life insurance Non-life insurance t

USD billion






Any questions?

Related Finaccord publication:

Bancassurance in sub-Saharan Africa: Current Status and Future Outlook to 2020 (published September 2014)



bancassurance in sub-saharan africa: current state and future perspectives

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