Insurance is a service of the tertiary sector of the economy that provides a service upon the occurrence of an uncertain and random event called risk.
The different insurance schemes allow to cover most of the risks of life, whether they are attributed to natural or legal persons.
Through its essential functions of risk coverage and recycling of savings, insurance plays a vital role in the economic activity of a country.
Since 1964, UNCTAD (United Nations Conference on Trade and Development) has recognized that "a soundly based domestic insurance and reinsurance market is an essential element of economic growth.
The development of the insurance sector will thus improve its contribution to economic growth.
The most commonly used indicators to judge the development of the insurance market in a given country are: the penetration rate and the insurance density.
The insurance penetration rate for a given country is calculated by expressing total insurance premiums as a percentage of the country's gross domestic product (GDP) and indicates the extent to which the insurance sector contributes to the national economy.
Insurance density in a given country is the calculation of the volume of premiums per capita. Expressed in monetary units (FCFA for West African countries), it indicates the average amount spent by each inhabitant to cover risks.
In Benin, as of December 31, 2019, the insurance sector includes fifteen (15) insurance companies, of which six (06) are in life insurance and the rest are property and casualty companies (Fire, Accident and Miscellaneous Risks).
The insurance penetration rate, which has stagnated at 0.70% since 2017, rose to 0.72% in 2019. Nearly 60% of this rate is achieved by property and casualty companies.
As for the density of insurance, it has been increasing since 2018 and stands at 4,984 FCFA in 2019. Beninese therefore spent, on average, about FCFA 5,000 on insurance coverage. The density of the life insurance branch was 2,020 FCFA.
The very slow progress of the penetration rate (quite low) demonstrates the poor development of the insurance market in Benin. The insurance culture is not well developed in Benin and the insurance sector actors at various levels must work to popularize this culture.
Source: Realization AJEB from the data of the Direction des Assurances
Source: Realization AJEB from the data of the Direction des Assurances
CJEA
