(Business in Cameroon) - In Cameroon, the impacts of the coronavirus will not be felt the same way by the various branches of the insurance sector. This is revealed in a publication made by Protais Ayangma, insurer and founder of the ‘National Insurance Company’ which became ‘Saham Assurance Cameroun (2014),’ on the impact of coronavirus (Covid-19) on the insurance sector in Cameroon.
"Several branches could be impacted more or less significantly. These include transport insurance, travel insurance, health insurance, life insurance, car insurance, among others," Protais Ayangma says. Overall the insurer reveals, the health crisis will have a "limited impact" on the sector.
According to the publication, transport insurance (13.38% market share), particularly maritime transport (nearly 10% market share), is likely to experience a sharp decline if the health situation does not improve. The same applies to travel insurance. However, the impact will not be very significant on the overall sector since that branch’s contribution to sectoral turnover is very low, he adds.
"The automobile (26.7% of market share), which is mandatory, might not be impacted by Covid-19 as far as turnover is concerned." Also, the limitation of travel, especially interurban, and the limitation of the number of people transported by taxis and cart bikes could have a positive effect on the claims rate of this sector, which was around 47.51% in 2018, he states.
Health insurance could also not be impacted because pandemics are excluded from the covered risks (it was also the case with AIDS) and the government is paying for all the cares of those infected by the virus. The results of this branch could also be improved by the forced halt of medical evacuations, which constitute a significant portion of insurers’ expenditures.
"For the payment of premiums in the life insurance sector, they could stop, be delayed or there could even be surrenders of savings products (41% of the life turnover). The loss ratio is expected not to deteriorate because the mortality rate related to this virus is relatively low in our country, and insurers are slow to decide whether or not to cover this pandemic, which is generally excluded from contracts," the insurer states.
In Cameroon, with a turnover of XAF207 billion in 2018, the insurance penetration rate, was around 0.97 percent, according to official figures from the National Insurance Administration. Nevertheless, according to Mr. Ayangma, there is a reason to fear a slowdown in the growth, even a slight decline, of turnover in this sector which has been growing at an average annual rate of 5% over the past few years.