Table 1 – Top Mozambican Insurers in the life segment (at end of 2016)

Ranking Insurers Market Share
2015 2016   Business 2015 2016
Global Alliance Life, Non-Life 33.7% 38.3%
Seguradora Internacional Moçambique (SIM) Life, Non-Life 26.0% 21.9%
Emose Life, Non-Life 22.0% 17.0%
Hollard Life 14.3% 16.4%
Sanlam Life 4.0% 5.0%
Tranquilidade Life 0% 1.1%
Fidelidade Life 0% 0.2%
MCS Life, Non-Life 0% 0.1%
Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM), the main regulatory body for the Mozambican insurance sector.

Claim ratio in the life segment reached 45.2% in 2016. Equity-to-total asset ratio was at more than 33% last year compared to 29% in 2015 and 28% in 2014. When we take non-life segment business into account, Global Alliance (23.2%) remains the number one insurance group in Mozambique by market share, followed by Emose (20.3%) and SIM (18.5%). The number of Mozambican insurers has increased considerably over the last five years, tripling to 14 in 2013 and reaching now a number of 14 operating groups. Only five of these companies have been operating in the country for more than 4 years. Global Alliance was incorporated in 1993 and was previously a 99.5% owned subsidiary of Global Alliance Holdings. In 2011, 100% of its shares were purchased by the Absa Group, with its ultimate holding company being Barclays Bank Plc (UK) with a 55.62%. The Mozambican insurance industry is two-tier structure, the 4 or 5 largest companies accounting for over 90% of market gross written premiums (GWP).

 

Figure 1 – Mozambique’s Life Insurance by Segment (at end of 2016)

Life segment

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

Figure 2 – Mozambique’s Non-Life Insurance by Segment (at end of 2016)

Figure 2 - Non-Life Segment

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

In their August 2014’s Mozambique Insurance Analysis, experts from Global Credit Ratings explained that there are two principal classes of compulsory insurance in Mozambique: “It is compulsory to insure with a locally registered insurance company for motor third party liability for any vehicle intending to circulate on the national roads, whether the vehicle has a local or foreign registration. For foreign registered vehicles, insurers utilize agency networks to issue such policies at key entry points into Mozambique. Additionally, all businesses and organisations are required to have workman’s compensation insurance to cover their employees in the case of a work-related accident. This notwithstanding, market consensus is that enforcement of compulsory insurance products remains undeveloped.”

 

Figure 3 – Capital Structure (at end of 2016)

Figure 3 Capital Structure

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

Figure 4 – Evolution of Capital Structure (at end of 2016)

Figure 4 - Evolution of Capital Structure

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

ISSM states that the strong increase (62%) in Shareholders Equity in 2016 is the result of capital injections and additional reserves from several insurance companies. This occurred during a period of strong political uncertainty (FRELIMO-RENAMO tensions) and low investor and consumer confidence that followed the discovery of secret public debt (Ematum scandal) and the subsequent deterioration of Mozambique’s indebtedness ratios. Such capital strengthening may be strategically preventive from the industry, as risks of excessive inflation and currency volatility may worsen liquidity conditions. However, in April 2017, Banco de Moçambique (BdM) cut its benchmark lending rate by 50 basis points to 22.75%, citing favorable changes in inflation and the exchange rate of the metical.

 

Figure 5 – Number of insurance intermediaries (at end of 2016)

Figure 5 - Intermediaries

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

At the end of 2016, a total of 586 such intermediaries had operations in Mozambique. This represents an increase of 21% compared to 2015. These are composed of 80 insurance brokers (78 insurance brokers and 2 reinsurance brokers), 14 insurance agents registered as companies, 125 agents for personal or retail clients and 367 insurance promoters.

 

Figure 6 – Composition of insurance intermediaries

Figure 6 Composition of Intermediaries

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)

 

ISSM draw attention to the fact that the volume of premiums proceeded last year by insurance brokers do not entirely reflect its performance. Insurance brokers’ gross premiums represented more than 46% ($80.5 million) of all premiums processed in the country in 2016. The number may actually be much higher, as only 49 out of the 80 Mozambican brokers have shared their data with the ISSM.

Figure 7 – Solvency Margins

Figure 7 - Solvency Margins

Source: Instituto de Supervisão dos Seguros de Moçambique (ISSM)
Related article on Zimpeto Press:
Competition intensifies among Mozambican Insurers
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Mozambican Insurance Market in 2016

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