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The insurance sector in Togo is highly competitive, with several companies operating in a growing market. Despite an environment marked by the adverse effects of the pandemic, the Togolese insurance market had a fairly satisfactory 2020 financial year, resulting in an operating profit of 2.57 billion FCFA, compared to 2.235 billion FCFA in 2019, an increase of 15%.
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Insurance is an essential component of sustainable and truly inclusive economic development. Insurance culture has struggled to gain traction in Togo. The population has not fully understood the need to insure their car, motorcycle, home, business, or family.
The Togolese Insurance Committee was created to clean up the market and eradicate price wars, particularly in the insurance of taxis, trucks, buses, and transit vehicles. Governed by the CIMA (Inter-African Conference on Insurance Markets) code, the Togolese insurance market is driven by leading companies in the sector. Despite an environment marked by the adverse effects of the pandemic, the Togolese insurance market had a fairly satisfactory 2020 financial year, resulting in an operating profit of FCFA 2.57 billion, compared to FCFA 2.235 billion in 2019. This result is due, among other things, to better cost control.
The market's overall turnover for the 2020 financial year stood at 68.767 billion FCFA, an increase of 10.8% compared to the previous financial year, with coverage of regulated commitments and a solvency margin exceeding regulatory standards. The digitalization of the sector is one of the priorities included in the government's 2020/2025 roadmap.
As of December 31, 2020, the Togolese insurance market had 12 insurance companies registered under the status of public limited company. 5 companies operate in the Non-Life sector, 7 companies in the Life sector, including one in microinsurance. The market also has two reinsurance companies: CICA-RE and SAHAM-RE. A Risk Management Pool for Public Passenger Transport (TPV) for two- and three-wheeled motorcycles has been in place since April 1, 2009. This is an economic interest group called POOL TPVM-VT GIE, bringing together all the Non-Life insurance companies on the market. These companies are grouped within the Committee of Insurers of Togo, a professional association whose aim is to defend the moral and material interests of its members, the promotion and development of the insurance industry in Togo and based on the respect of commitments.
The market is also dotted with a dense network of insurance intermediaries (56 in 2020), operating partly as general agents for companies alongside 34 brokerage firms. The insurance broker is the policyholder's representative. He is a true long-term advisor. This network of intermediaries brings insurance closer to the population by offering outsourced services. The penetration rates for the years 2018, 2019 and 2020 were 1.50%, 1.47% and 1.56% respectively.
The year 2020 recorded a mobilization of 31.924 billion CFA francs in equity compared to a total of 30.974 billion CFA francs in 2019, representing a slight increase of 3.07%. This mobilization may be due to a better financial base of certain companies.
At the end of the 2020 financial year, the non-life insurance branch recorded an increase in written premiums of 5.785 billion CFA francs compared to 2019, reaching 38.040 billion CFA francs. Written premiums in 2020 therefore increased at a growth rate of 17.9% compared to 8% in 2019, a faster rate compared to the previous year.
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Personal Accidents and Illness, despite a slight decrease, retained the largest market share, at 41.6% compared to 44% in 2019, followed by vehicle insurance (28.8%).
The 2020 financial year saw claims costs increase by 6.4% (+1.087 billion), representing a total of around 18.012 billion CFA francs compared to 16.924 billion CFA francs in 2019.
In 2020, the available margin of Non-Life companies reached 11.805 billion CFA francs, an increase of 12.8%. The regulatory margin, for its part, saw a more significant increase of 23.3%, thus increasing from 5.666 billion CFA francs in 2019 to 6.986 billion CFA francs in 2020.
Non-Life companies ceded more premiums to reinsurers in 2020 than in 2019, a significant increase of 43.9% to reach 7.957 billion CFA francs compared to 5.528 billion CFA francs in 2019.
The increase in premiums ceded to reinsurers in 2020 is explained by the implementation on January 1, 2020 of the legal cession at the first franc established by CICARE at the rate of 5%. This trend will be revised downwards in 2021 since, at the request of FANAF after consultation with insurance companies, this rate is revised to 2.25%.
The net operating profit for the year recorded an increase of 1.579 billion CFA francs to reach 1.915 billion CFA francs in 2020 compared to 0.335 billion CFA francs in 2019, an increase of 471%. The continued upward trend in results reflects the good performance of Non-Life companies and is largely due to better control of expenses and claims.
The turnover of the Life branch recorded a slight change of 3.1%, reaching 30.726 billion CFA francs against 29.803 billion CFA francs in 2019. Compared to 2019, the breakdown by category shows an inverse trend in 2020. Indeed, individual insurance is more in demand, representing 50% of the total premiums and 48.8% for group insurance. The distribution of market shares by product shows that the first product in the life market remains Savings (group + individual insurance) for nearly 60% of the total. The second activity of the branch is the death contract with 22.4% of market share. As in 2019, no premiums were recorded for life insurance contracts, capitalization securities and supplementary insurance during the 2020 financial year. Individual insurance saw an increase of 23.10% in their due benefits compared to the previous financial year, while group insurance saw a decrease of 11.11%, resulting in a slight increase of 1.2% in total due benefits. In the Life market, 57% of due benefits were recorded in group insurance for the year 2020 compared to 65.1% in 2019. The largest part of financial income is attributable to group insurance, i.e. 56% compared to 43% for individual insurance.


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