The insurance industry encompasses risk management and transfer. Therefore, it has thrived for centuries in the business world due to its naturally risky nature. Today, insurance basically covers all spheres ranging from business to personal life.
Insurance is also one industry that thrives in a country like Cameroon, with records showing that the sector had a gross written premium running into billions of Francs CFA. This comprehensive guide is simply an overview of the insurance business in Cameroon.
Overview of the Insurance Industry in Cameroon
What is the History of Insurance in Cameroon?
The insurance industry in Cameroon has been in existence since 1973, when the first company was established (Chanas Assurance). The African Insurance company Limited came into life after Cameroon gained independence.
Chanas became one of the two principal partners of the very young national company. This privileged position enabled it to buy out its portfolio when Cameroon decided to free itself from SOCAR (Société Camerounaise d'Assurances).
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It must be reiterated that the insurance industry in Cameroon still faces some problems. Nevertheless, the capacity of adaptation of the founder has enabled Chanas to rise sharply, in a short time, from the status of an intermediary to that of the first insurance company in Cameroon. The insurance company overtook large insurance groups like AGF-Allianz and AXA.
How Does Insurance Work in Cameroon?
Insurance businesses in Cameroon and around the world operate in the financial sector. Its principal function is to guarantee the replacement or monetary compensation of assets in case of damage in exchange for a premium. Therefore, in a nutshell, you purchase coverage on your asset, make periodic payments called premiums, and the insurance company bears the risk of that your asset.
Also, the specific value of your premium could differ depending on your agreement. For example, if you insure your car at a 7500000 FCFA, they would require that you pay a premium to the insurance company at scheduled dates, in the range of 175000 FCFA. Furthermore, if your car is stolen or damaged, the insurance company would be mandated to pay N2 million as compensation.
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However, on the flip side, if your premium duration expires and you do not have any claims, the insurance company will not return any part of your premium to you. Therefore, the potential that no damages would occur to an asset and securing the resulting premiums is how they make money.
Who Regulates Insurance in Cameroon?
The current body regulating the insurance business or industry in Cameroon is the CIMA (Code des Assurances des Etats Membres de la CIMA). Its essential task is to ensure the adequate supervision, administration, regulation, and control of all insurance businesses in the country. Hence,, it must protect insurance policyholders, subsequent beneficiaries, and other third parties.
How to Register an Insurance Company or Business in Cameroon?
Starting an insurance company in Cameroon requires that you meet specific criteria and follow some steps. The procedures required are:
- Register the insurance company with the government of Cameroon.
- Get duly registered with insurance regulatory agencies (CIMA)
- Register with a re-insurance company to protect your company in cases when a claim is too large
- Acquire the required necessary permits and licenses depending on the state you want to operate in
- Plan out the insurance risks your company would cover. Only start with the low-risk profitable ones
- Gather enough money in your reserve (required for insurance business registration in Cameroon)
- Finally, decide whether you want to stand alone or become a franchise of an established insurance company.
Conclusion
The insurance business in Cameroon is profitable as long as you have the right set of workers. In essence, each department in the company works to make things successful and never underestimates the place of a risk analyst. Now, you have a general overview of the insurance business in Cameroon.
See Also: List of Insurance Companies in Cameroon.