31215 - Activa Finances

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Summary of Investment Information

Project Number

31215

Company Name

ACTIVA FINANCES LTD

Date SPI Disclosed

Apr 30, 2013

Country

Cameroon

Region

Africa

Projected Board Date

May 31, 2013

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jun 13, 2013
Signed : Jul 25, 2013
Invested : Jan 10, 2014

Sector

Composite Insurance (Life and Non-life)

Project Description

The project consists of an equity investment in Activa Finances (“Activa” or the “Company”), a holding company domiciled in Mauritius which controls the group’s operating subsidiaries, directly or through a majority stake in the group’s largest asset, its non-life subsidiary in Cameroon, Activa Assurances. Activa is registered as a Category 1 Global Business Company in the Offshore Financial center of Mauritius.

Activa Assurances was formed in 1998 and in turn owns majority stakes in Activa Vie (life insurance, Cameroon), Activa International Ghana Limited (non life insurance, Ghana), a minority stake in Globus Re a captive reinsurance company which reinsures a portion of the risks underwritten by Globus members and a 5% stake in La Loyale Assurances from Côte d’Ivoire.
Activa has built a strong domestic base in Cameroon and Ghana and will continue to focus on becoming a leading insurer in the CIMA zone (Conférence Interafricaine des Marchés d’Assurance) covering 15 insurance markets with harmonized regulation. The Company intends to establish a foothold in other markets in Western and Central Africa through acquisitions or new licenses, as was done in Liberia and Sierra Leone with the acquisition of a composite insurance license in the former and a new license in the latter country. This regional expansion should be facilitated by the Globus network of independent insurance companies founded by the Chairman of Activa. The Globus network leverages its reach which spans across more than 30 countries on the African Continent to further the growth of its members.

The project aims to support the above expansion strategy by providing capital, an institutional stamp of approval and contributing IFC’s knowledge of global trends and best practices in the insurance industry.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	5.70

Development Impact

The development impact of IFC''s investment in Activa will be measured by the following metrics: (i) growth in insurance premiums, (ii) growth in sums insured, as well as (iii) the creation of new subsidiaries in other markets in a region characterized by very low levels of insurance penetration currently and (iv) the development of new products that should extend the reach of insurance cover in the markets concerned (micro-insurance, weather risk insurance for farmers, etc). There will also be a strong demonstration effect by supporting a local entrepreneur who is building a regional group and has had some success already in creating a panafrican insurance alliance (Globus Network) as well a regional reinsurance platform (Globus Re).

IFC''s equity investment will provide growth capital to a leading regional insurance company to support its expansion in new markets in West and Central Africa where insurance penetration is low. As a partner in Activa, IFC will use its existing financial sector relationships to allow the company to expand its delivery channels through bancassurance, and will provide the company with knowledge of insurance markets in the region. IFC can also help develop micro-insurance solutions and new products such as crop insurance (through the Global Index Insurance Facility) which are relevant in markets with a strong agricultural base such as Cameroon and Ghana. An IFC investment in Activa should help institutionalize the Company ahead of a possible listing in the medium to long term.

E&S Category Rationale / Risks and Mitigation

This equity investment in a regional insurance group with operating subsidiaries in Cameroon as well as in Ghana and in other future countries has been classified as Category FI-2 according to IFC’s Environmental and Social Review Procedure. Activa is a composite insurance provider which provides insurance cover for fire and related risks, marine/transport and motor insurance cover, mainly to corporate clients but also to SMEs as well as to households, notably life insurance for the latter clients. The overall E&S risk of Activa’s portfolio is considered to be medium.

The overall E&S risk of Activa’s portfolio is considered to be medium which can be managed by Activa and its subsidiaries by undertaking E&S due diligence for insurance provided to corporate clients and ensuring that these are screened against the IFC Exclusion List, the national laws and regulations and the IFC Performance Standards (where applicable). Based on IFC’s appraisal, Activa has limited procedures for assessing the E&S risk during the underwriting process.

Contacts

For Inquiries About the Project, Contact

The Chairman and Chief Executive
Activa Group
PO Box 12970 Douala
Republic of Cameroon
Tel: +237-33501301
Fax:+237-33434572

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Activa Group
Rue Prince de Galles
Douala
Republic of Cameroon
Tel: +237-33501301
Fax:+237-33434572

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Description	Anticipated Completion Date
Nominate E&S Officer	On or prior to commitment
Establish an ESMS including guidelines for implementation	On or prior to disbursement
Implement staff training	At all times
Submit examples of completed E&S due diligence undertaken during underwriting process	Within 6 months of disbursement

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