INSURANCE: pan-African actors | companies



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  The Mutual Building - cREDIT / AndyB
Insurance companies have been slower than banks to develop their continental ambitions. Leaders of two major South African companies, Sanlam and Old Mutual, tell Africa Report their African footprints and plans for expansion

Two major South African insurers have their eyes riveted on the continental market: the giant Sanlam moves into the French and North African markets, while Old Mutual divides its business so that its emerging markets entity can focus on growth opportunities in South Africa and the rest of the continent. South Africa is the continent's strongest insurance market and thus provides a solid foundation for African expansion, especially as the economy looks more promising under new leadership.
  Sanlam acquires full ownership of Moroccan Saham Finance March SOURCE: SANLAM

Sanlam has an important lead length in the race against Old Mutual. It now operates in 33 other African countries, and its operations in Africa accounted for 13% of the group's profits in 2017. Old Mutual, on the other hand, has experienced slower growth on the continent, with some investors claiming that its US and UK operations do not fit well with its emerging markets portfolio. Old Mutual is present in 13 other African countries and its remaining African units accounted for only 3% of its profits in 2017.

Both companies are now making significant efforts to strengthen their positions in the highly competitive southern market -African and the split of the Old Mutual Insurance Group, listed in London, in African interests and others, which is expected to be completed in June with a listing on the Johannesburg Stock Exchange, comes at a good time. Old Mutual moved its main list from Johannesburg to London in 1999 in the hope of attracting more investment. After having liquidated some international investments which did not complete well its portfolio, Old Mutual looks at Africa with a new perspective

Great speech, cautious action

The Prodigal son, Old Mutual, "looks forward to his return to Africa," said Jonas Mushosho, managing director of the former Mutual Rest of Africa, to The Africa Report. Its strategy is to become "Africa's leading financial services group in 17 countries," which currently includes South Africa, Botswana, Malawi, Namibia, South Sudan, Tanzania, Zimbabwe, Ghana, Kenya, Swaziland and Uganda. It offers savings, investment, insurance, banking and wealth management services.

But his strategy now seems to be a cautious consolidation without much talk of organic or acquired growth: "As an African-based autonomous public enterprise, we will focus on Africa and we are well positioned in key geographical areas of Sub-Saharan Africa in several business sectors in order to make the most of the continent's growth potential, "says Mushosho, highlighting the group's reach in relation to South African peers. Old Mutual has a long way to go to catch up with his rival Sanlam after the latter's $ 1 billion deal to take over the Moroccan insurance group Saham. "Junior Ngulube, general manager of Sanlam Emerging Markets, told The Africa Report that Saham "has a pan-African vision similar to ours, but started in the north." His presence in the Maghreb should leave Old Mutual thinking: Morocco is the second largest insurance market in Africa after South Africa. The combination of Sanlam and Saham "gives us a unique position to operate in all linguistic regions of the continent," says Ngulube. Sanlam primarily offers life and general insurance, as well as personal and badet management credit, while Saham is also strong in the health and administration of third parties.

Sanlam operates in Africa through partners in almost every country. "We know financial services, but our partners know specific countries," says Ngulube. This has allowed it to be among the top three leaders in the life insurance market in eight African countries and general insurance in 11 African countries.

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Multinational Partners

The geographical footprint of Sanlam is significant, with the largest deviations in some parts of the world. North Africa, East and Central. Ngulube claims that Sanlam Emerging Markets is still interested in Egypt and Ethiopia, although regulations currently prevent it from suing the latter. "Our geographic footprint is pretty much complete," says Ngulube. "The next phase is to make sure we have strong and leading companies in each country.Secondly, at this point, we do not have all our products in every country. 39, expand our product and coverage offering on the continent. "

A key strategy is to be a partner for multinationals, many of whom are already enrolled. "If you are a multinational in 20 countries and we have 33, you will be covered in all the countries where you operate by talking to Sanlam," he says. "We are looking at the specific needs of our field employees […] such as travel, health, emergency evacuation and business solutions."

Sanlam Emerging Markets Proposes also solutions for other international insurers with clients in Africa but are not in Africa themselves. Sanlam started to expand its business in Africa with the acquisition of African Life in 2005 and significant expansion activities were carried out with the Nigerian bank FBN, bancbadurance operations in Morocco with the Bank Morocco and badet management in Kenya following the acquisition of PineBridge East Africa. 2017. She also holds the leading market share of life insurance in Tanzania and Rwanda. In addition, in 2016, Old Mutual and Nigeria Sovereign Investment Authority laid the groundwork for two mutual funds seeking to raise $ 700 million to invest in agricultural and real estate projects.

Performance varies with different investments, but currently Botswana, Namibia and Morocco are doing quite well. "Per capita incomes and disposable incomes are quite decent, which is reflected in the penetration [insurance]." Looking at our portfolio, they contribute significantly, "It is possible that other economies are not progressing quickly or We do not have a high per capita income, but if we have appropriate products for these markets, we see strong growth, as in the life sector in Nigeria. "Sanlam also signed an agreement with a Tanzanian firm Maxcom Africa accepts in May payments via mobile money platforms for insurance premiums

At the recent African CEO Forum in Abidjan, Sanlam won the African company of the year, while Nadia Fettah, Saham's director of the year, they are proof of Sanlam's success on the continent, concludes Ngulube.

The strategy of Old Mutual, likewise, is to build a pan-African brand and di federated regionally. The CEO of Rest-of-Africa, Mushosho, says the company is the market leader in the Southern African Development Community (SADC). In East Africa, it focuses on its existing business while its approach in West Africa "is to develop business by relying on relationships with strategic partners , such as bancbadurance. "

M. Mushosho says the group continues to "see a lot of opportunities, especially if we consider the underdeveloped sector of insurance in Africa". Among the priorities of the group, there is East Africa. He is spending "a lot of time and energy optimizing" his $ 155.5 million investment in 2015 in UAP, an insurance company headquartered in Kenya. The UAP agreement accounted for about half of the funds set aside by Old Mutual for large African investments several years ago.

In West Africa, he focuses on growing his operations in Nigeria and Ghana. "Building on our bancbadurance partnerships" in a challenging economic environment, Mr. Mushosho says Old Mutual's strategy for SADC countries is "to exploit pockets of growth as it moves forward." and as they arise and we will continue to maintain the strength of our core businesses through service excellence and product relevancy. "

Peter Moyo of Emerging Financial Markets, Speaks Little from Africa during the presentation of the group's financial results in mid-March, except that its operations generated an impressive pre-tax adjusted operating income of 33% compared to the previous year. equity

In the month of August 2017, Old Mutual Emerging Markets had 11.6 million in Africa and 4.9 million in the rest of the world. Africa – something on which he will be sure to s & # 39; support while he focuses on Africa with his separate list.  TAR101p56-f

But the group's business in Africa is not limited to insurance. Through Old Mutual Investment Group, the company has invested more than 61 billion rand across the continent, divided between infrastructure, private equity and impact funds, listed shares via the Old Mutual African Frontiers Fund and Agricultural Investments. In May, Old Mutual Private Equity acquired a 50% stake in Medhold Group, a leading medical device provider in Southern Africa.

Paul Boynton, managing director of Old Mutual Alternative Investments, told the media that the investment outlook in Africa 2018 is good: "Infrastructure is the most urgent developmental need of the world. Africa and therefore the most promising investment opportunity for those who are ready to take a longer term position ". 600 million people in sub-Saharan Africa still do not have access to electricity, three quarters of the roads are still not paved, while freight transport in African ports is three to four times more expensive than in Europe. Africa's well-structured and well-managed infrastructure projects offer consistent, reliable long-term returns and will continue to attract investor attention. "

Randolph Oosthuizen, badyst for the African Former Mutual Frontiers Fund, said an interesting pipeline of companies entering the Egyptian market, where the government is also planning to sell part of its stake.

South African government, in its new budget announced in February, increased the allowable investment limit for pension funds to the rest of Africa by 5% to 10%. not be rushed to fill their allowances, this should lead to an increase in investments on the continent, and Sanlam and Old Mutual should benefit.

Print from the print edition of June 2018

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