Proparco invests in Sub-Saharan African insurance company

Yaounde, Capital Markets in Africa: The insurance sector is an engine for the economic and social development of Africa. It is for this reason that Proparco is supporting the expansion of Activa Group via an equity investment.

Proparco has committed a EUR10mn equity investment in Activa Group to support its development in Sub-Saharan Africa.

Activa Group was set up in Cameroon in 1998 and is a major insurance player (life and non-life) in Sub-Saharan Africa. It has subsidiaries in five countries: Cameroon (Activa Assurances and Activa Vie), Ghana (Activa International Ghana), Guinea (UGAR Activa and Activa Vie), Liberia (Activa International Liberia) and Sierra Leone (Activa International Sierra Leone). Its majority shareholders are its founder, Richard Lowe, and private Cameroonian players, alongside the multilateral counterparts, Proparco and IFC.

Activa is developing in Africa by relying in particular on the Globus Network which it set up in 2007. Globus is a non-integrated network of insurers offering international clients and brokers a globalized solution in over 40 French-speaking, English-speaking, Arabic-speaking and Portuguese-speaking countries via a platform based in Cameroon. It is the main partner of the leading international insurers which do not have subsidiaries in Africa (Generali, Zurich, Chubb, XL, etc.). Globus has also set up a captive reinsurance company, Globus Re.

The invested funds will support Activa Group’s development, particularly in Central Africa and West Africa. By becoming a shareholder of Activa, Proparco is underscoring its support to the vision promoted by a dynamic group, which is developing an expanding African market. This market currently accounts for barely 1.5% of the world insurance market and, with the exception of South Africa, the penetration rate accounts for less than 1% of the continent’s GDP. However, several factors point to a rapid development of the sector, starting with Africa’s economic dynamism, the emergence of middle classes, the development of new distribution methods, such as the range of products and services via mobile phones.

This growth in the sector is especially expected because insurance has the potential to participate in Africa’s development. Indeed, it contributes to boosting growth, increasing the resilience of local economies to extreme events and promoting solidarity between individuals. There is, in addition, its capacity, which is currently limited in Africa, to channel household savings and make long-term investments in companies and infrastructure projects to support local development.