Company's perspective: TOTAL on insurance in Africa and benefits of pooling

With its historical presence and over 9000 employees across Africa, Total has been witnessing the evolution of the Employee Benefits sector in the continent. We discuss with Mr Jean-François Beautems, Head of Insurance (Group Employee Benefits), about achievements and opportunities for growth ahead.

What you need most from your employee benefits partner in Africa?

Quality of claims management is a major concern for our affiliates in Africa each time we collect their feedback. Coming sometimes from a self-insurance background, they value straight-forward and efficient processes.

Medical benefits are also a key concern. Inpatient benefits can represent in some countries a large component of health care coverage. Medical evacuation is further crucial as you may not have access to health facilities: Total responded to this challenge by developing for example  its own medical facilities available to all employees in some countries.

Finally in terms of assistance, we are increasingly looking at innovative proposals (care services and personal assistance) to go beyond basic coverage and devise a wide range of tailored solutions to enhance our employees lives

How to identify the right partner in the region?

In the past it was difficult to find a partner at all, this explains why we had some affiliates that were self-insured. Now competition is increasing and more players are entering the market, but we still have a large number of employees, in countries that are small but strategic to Total, who are not covered by an insurance company.

International network as GEB, can help foster capacity building and business growth in new regions. We regulalry monitor networks development. Today only GEB and maximum other 2 players worldwide can provide adequate coverage in the continent, most of the others are either not present or operating in restricted areas. We expect networks to be able to stretch their capacity to accompany our expansion.

How the sector is evolving in terms of availability and quality of service?

Pooling networks have been paving the way. There is a clear trend of growth in terms of solutions available, competitors and professionalism. This is also supported by a positevely evolving regulatory landscape. We have restrictions in the CIMA zone (insurance industry organisation of French-speaking countries)^[1] where we cannot pool more than 75% of the risks. Overall we find the African market very dynamic and open to business. There is ambition and a strong appetite for development. African insurance companies are often in Paris, to visit us and explore business propositions.

What are the challenges that remain in setting up and /or daily running employee benefits programs in Africa?

Africa is not an exception when compared to other regions. When we receive our annual global report and we look at the breakdown by country, we can clearly see where the points of attention are and very often they arise in other areas. However the conservative approach to pricing remains one of the main barriers for affiliates to move from self-insurance to external providers. In this field, we cannot simply look for the cheapest offer. But it is important that pricing is reasonably based on correct assessment of risk and clear definition of added value services.

Setting up a pooling network can help by enhancing central governance and synergies of costs while allowing for more attractive underwriting conditions at local level (free cover limit, age limit, waiver of exclusions, etc).

What are in your view key advantages of pooling?

I would point out three main advantages.

First, a common group program helps us develop cross-functionality in affiliates’ policies across branches from upstream (exploration and production) to downstream activities and this is key to Total.

Secondly, the consolidated reporting at group level. Rolling-up of information from local affiliates, we can get an overview of Group insurance budget, also taking into account international dividends, taxes etc.

Finally, when local policies are reinsured we have more flexibility in negotiating renewals. Hospital costs make medical loss ratio in Africa very volatile: if one year the loss ratio is too high, we have a litlle more time to go back to break even.

Why did you select GEB among your partners and how we can best support you? 

In general we prefer to work with an integrated network based on reinsurance, acting as a trusted partner that can guarantee worldwide service delivery and consolidate benefits for us. Then we looked at the strongest presence in Africa and leadership in expatriate benefits.

Looking forward, we need a partner to develop business with in countries where the insurance market is not yet developed, where we are still self insured or we cannot pool policies.