The 12th Forum of the African National Insurance Markets, organized by the Fédération des sociétés d’assurances de droit national africaines (FANAF), kicked off in Lomé, Togo, on Monday. The event brings together insurers from across Africa to discuss pressing issues affecting the industry. One of the main topics on the agenda is the persistent problem of credit insurance, a practice that has been banned in the CIMA zone for 15 years but remains widespread.
Credit insurance, where coverage is provided without payment, has been prohibited in the CIMA zone since 2011. Article 13 of the CIMA Code states that insurance coverage only takes effect once the premium has been effectively paid. Despite this, many insurance companies continue to struggle with unpaid premiums and unrecoverable debts. This has significant implications for the financial stability of insurers and their ability to pay claims in the event of a disaster.
André Azibli, president of the Association professionnelle des sociétés d’assurance du Togo (APSAT), attributes the problem to a lack of adherence to existing regulations rather than the legislation itself. To address this issue, APSAT proposes establishing a monitoring system to ensure compliance with Article 13 and introducing a binding charter to regulate intermediaries responsible for collecting and remitting premiums.
The forum also focuses on the sensitive issue of covering state and government-related risks, as these entities are often slow to pay their premiums. The Togolese government has expressed support for the initiative, with Minister of Insurance Jean-Marie Koffi Tessi emphasizing the risks credit insurance poses to the entire financial ecosystem. He advocates for greater transparency and the use of digital tools, such as mobile payments, to secure premium collection and remittance.
The conference aims to achieve a common understanding among stakeholders and develop a memorandum of cooperation between FANAF and the CIMA, the sector's regulatory body. Participants are working towards a unified approach to addressing the challenges posed by credit insurance and finding solutions to ensure the long-term sustainability of the insurance industry in Africa.
The CIMA zone comprises African countries that share a common insurance regulatory framework under the auspices of the Conférence interafricaine des marchés d’assurances (CIMA). FANAF, meanwhile, is the primary professional organization for African insurers, particularly in Francophone Africa. The two-day event provides a platform for industry stakeholders to engage in discussions and share best practices.
The Togolese government's support for the initiative underscores the importance of addressing the issue of credit insurance. By working together, regulators, insurers, and industry stakeholders aim to create a more stable and sustainable insurance market in Africa. The outcome of the forum is expected to have far-reaching implications for the industry, with a focus on strengthening regulatory frameworks and promoting greater transparency and accountability.
Key points
- Insurers aim to eliminate credit insurance, a practice banned in the CIMA zone since 2011.
- The Togolese government supports the initiative, emphasizing the need for transparency and digital tools to secure premium collection.
- The forum seeks to develop a memorandum of cooperation between FANAF and CIMA to address industry challenges.
