Bancassurance could see new growth in Africa with the arrival of Ecobank
CEO of Ecobank Thierry Tanoh has revealed that the pan-African banking group will launch in the bancassurance sector "within a few months".CEO of Ecobank Thierry Tanoh has revealed that the pan-African banking group will launch in the bancassurance sector "within a few months".
"We are a bank and our intention is to stay in our area of expertise, but we've decided to develop long-term partnerships with insurance companies (...) I can confirm that we are about to finalize a partnership," Mr Tanoh told Ecofin news agency.
He added that the bank wants to offer its customers a "better service" through the provision of insurance products, "starting with the simplest products such as travel insurance, theft insurance, etc".
The distribution of insurance products through banking networks - called bancassurance - is slowly developing in Africa.
The West African and the Maghreb regions in particular have witnessed the birth of several partnerships. SOMAVIE insurance and the Ivory Coast Housing Bank (BHCI) have signed in April 2012 an insurance agreement, while Atlantique Ivory Coast Insurance and Atlantique Ivory Coast Bank have decided to offer their customers a single window for opening an account and subscribing to an insurance policy.
Similarly, BNP Paribas offers through its specialized subsidiary Cardif several insurance products in Algeria and CNEP-Bank - which also operates with Cardif - now occupies a leading position in mortgage insurance.
Bancassurance is considered a win-win partnership for banks and insurance companies. "It covers both the loan and the borrower against major risks," Abdelmajid, a former director of a CNEP branch, told newspaper La Tribune.
BNP Paribas believes it provides "a simple answer" to the financial needs of consumers and offers benefits such as ease of access to services, product simplicity and competitive prices.
By facilitating access to insurance for borrowers, bancassurance contributes to reducing
risks and thus helps
access to credit.
However, in Africa, the insurance industry is still in its infancy as the continent suffers from one of the lowest penetration
in the world.
"With a penetration rate below 0.5 percent relative to GDP, the sector offers great potential for development," said a group of experts at the first African Forum of Insurance Marrakech in 2010.
Several obstacles are hindering the development of bancassurance, CEO of the insurance company UA-Vie Mohamed Bah told Jeune Afrique, including a lack of interest from banks and a low banking rate in sub-Saharan Africa, where only ten percent of the population owns a bank account.
Despite these difficulties, the arrival of Ecobank could give the sector a boost in Africa, given that the group is present across 33 African countries.