Solvency and Reinsurance Treaty of an Automobile Portfolio: Case of Sub-Saharian Countries

The objective of this article is to analyse the actuarial solutions necessary to safeguard the solvency of an automobile portfolio, particularly for sub-Saharan countries. In the majority of Sub-Saharan countries motor civil liability is compulsory, it is the most important branch: In the CIMA zone (Inter African Conference of Insurance Markets), motor and health insurance make up 60% of the turnover of all 163 insurance companies (6). If the motor industry is badly managed, this can even lead to the insolvency of the insurance company. Faced with the internal needs of insurance companies to better control the underwriting risks of affaires and to adapt to the new and more demanding regulations regarding the quantification risks (Solvency II for Europe for example, with a Solvency Capital Requirement, the coverage is 99.5% of the risks not foreseen at one year(1) , another striking example is CIMA's decision, which requires all insurance companies in French-speaking countries to multiply their minimum social capital by 5 progressively, tripling it in 3 years and quintupling it in 5 years (2) ...), the empirical methods traditionally used have been replaced by probabilistic methods, based on modelling the annual frequency of claims and their ultimate individual severity. In order for the probability of an insurer's ruin to remain below a desirable threshold, according to ((8)RIMI, 2015), the insurer mainly has 4 means at his disposal which he uses jointly: loading the pure premium, setting up a reserve allocated to the risk, calling on reinsurance, using financial products.