Activa Insurance Ghana is Aggressively Targeting Personal Lines and Retail Business

Interview with Solomon Lartey, MD of Activa International Insurance Ghana

Could you give us your overall evaluation of the insurance industry? Right now it equals less than 2% of the GDP of Ghana, which is still very low even compared to other countries in the neighbouring region. Nigeria has a level already above 3%. We know the insurance sector is growing in terms of the number of insurance companies and the number of agents but there is still so much room for further growth.

I would like to start by commenting briefly about the general business environment in Ghana. Currently we think there is a certain degree of stability; since the new government took over we have seen that the Cedi is quite stable, and inflation has slowed and is actually falling, so basically the economy is looking positive. There was a criticism that the government had appointed a very large cabinet, with 110 ministers, but it looks like they know what they are doing so we are looking forward to much stronger economic indices at the end of the year. Having said that, how does it impact on the insurance industry in general and on micro insurance in particular? Generally the insurance industry has not seen much impact this year; even though the economy seems a bit stable it looks like some investors are holding onto their money, waiting to see how it goes before they release any money, and the growth of the industry is dependent on economic activity. Currently the reports on insurance activities have not been released so we don’t have much data to work with so I am talking about the feel of the market. There is a lot of talk about bank assurance and micro insurance in general. I have personally noticed a lot of life insurance partnerships in the market but it is still not translating into higher insurance penetration so it looks like all companies are doing the same thing; we are dancing around the same pie and sharing it instead of creating a bigger pie. Several speakers and writers have spoken about micro insurance being the way to go and so we see that some companies have set up separate micro insurance companies to try and target that segment. There is MicroEnsure and BIMA and others trying to target that segment but we have still not seen much activity and growth with regards to that. The government has promised to bring into realisation the national ID system so we will have a national identification system which will be linked to street names and house numbers. Once we are able to get that, and it is linked to a central data base, then it will enable financial institutions in general and insurance companies in particular to target individuals and make our offerings available to them. I believe that is key: the national identification system and the central data base is key to unlocking the potential that the insurance industry has with regards to the growth of both personal lines and micro insurance in this country.

We have to move faster, we have to have increased profitability and higher growth. I want to make sure that in the next 5 years we are in the top 3.

When is this system due to be completed and up and running?

We were promised that by the end of the year we would have it. We are looking forward to it. I have not heard of much development in that direction but we are hoping that they are able to do it. For me personally and for Activa, we are looking forward to it because we have plans for it. We also have a lot of products that we have developed and we believe we would do much better if we can have access to the population and identify and target specific people and specific areas of the economy.

In 2015, Activa Insurance, the leading insurance company in Ghana, was about to expand into the retail and SME sectors, and you said that you were going to enter the life insurance sector by 2016. What is Activa’s position in the market right now? What have been the latest developments in the company?

We wanted to do life insurance in addition to the non-life insurance that we are doing; 2016 was our target but we have not been able to achieve that because our structure is such that we have the holding of Activa Finance, then we have the various countries, and we had opportunities in other countries that we thought we should explore first. As I speak to you we have an office in Paris: Activa France, that is looking after our European contacts, and then we are now working on Activa Congo and Ivory Coast amongst other places. We have identified opportunities in some areas and because of that the group is looking at some of those areas first. That is not to say that we have abandoned the idea of having a life insurance company in Ghana, we would do that but in the interim this is what we are doing.

Talking about Activa´s activities with regards to retail, we did establish retail and agency units to handle personal lines and SME businesses in 2016. They are still there but global business or corporate business still accounts for a large share of our business. We haven’t abandoned the idea; we are aggressively targeting personal lines and retail business. The way we think to go forward is to set up a few strategies and that we have done and we are currently incubating them. We hope to launch a few products before the year ends and then in 2018, we will hopefully have a big bang on the retail side of things. We have a couple of things up our sleeves that we will release in the shortest possible time.

Can you talk about them more specifically?

Specifically we want to extend our networks within the country. We would do some on our own by establishing branches but we are also trying to work with agencies, i.e. existing companies that we would partner with to sell our existing products. We are looking at online sales; everyone seems to be attempting to do something online. We want to do it and do it properly and so that is another area that we are looking at. Basically these are the areas. We have tried partnering with banks and it looks like that is what everybody else is doing so we don’t want to do the same thing as everyone else, we are trying to come up with something that should create a higher S curve that what is there now. We intend to interrupt the market in the near future, so watch this space.

In our previous interview, you personally said that you were ranking number 7 in Ghana as an insurance company and you had a plan to get into the top 5 in the medium term of about 3 to 4 years, so how is this plan getting on?

Last year was tough. 2016 was really tough as it was an election year and as you know our company has nothing to do with political activity; we are not politically exposed so it was quite tough for us. So we haven’t really jumped from 7 to 6 or 5 yet, we are still number 7. We are hoping that by the end of this year we should do better. The truth is that the gap between number 7 and 6 is pretty wide, it is nearly double, and so it means that we have to do more than 100% production to be able to overtake them but we are gradually closing the gap. Last year we couldn’t achieve 100% of our target, we are supposed to grow 20% each year, last year we couldn’t and this year we have so far achieved 60% of our annual target and we have done 35% on top of what we did last year so we are on track.

It is looking promising?

Yes, we don’t have a choice!

What is your personal vision for Activa? What kind of legacy are you trying to build?

I was part of the team that started Activa Ghana, I was part of Global Alliance before Activa took over and when Activa took over I worked with Steve (former MD) to develop the company to where it is today. I have no choice but to grow it further from where it is now. The only difference would be to probably move at a faster but measured pace. We have to move faster, we have to have increased profitability and higher growth. That is how I want to grow. I want to make sure that in the next 5 years we are in the top 3.

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