• Rankings of the largest Mozambican insurers vary significantly from one quarter to the other

 

  • Most of them are foreign-owned and focus on non-life segments

 

  • Rankings among insurance intermediaries are more stable from one period to the other

 

By levy-sergio mutemba

In our former insurance-related article, we underscored the ongoing battle for market shares in the nascent Mozambican insurance industry. The latest data published by the national supervisor, Instituto de Supervisão de Seguros de Moçambique (ISSM), for the first six months of the year, reinforce that impression. Market shares rankings among insurance operators in terms of gross premium revenues are volatile, varying strongly from one period to the other.

Emose now leads the market

At the end of 2016, Global Alliance (Barclays Mozambique’s insurance business) ranked first in terms of market shares (26.8%). During the first six months of the current year, the group ranks fourth with a 12.9% market share. By contrast, Emose, one of the historical operators in Mozambique, founded in 1977, was positioned second at the end of last year but now leads the ranking with a 21.1% market share.

Mozambican Insurance Operators in terms of Market Shares

Q1-Q2 2017 Insurance Market Shares

Source: Instituto de Supervisão de Seguros de Moçambique (ISSM)
ICE may have officially started operations in 2015 but is present since 1996, after undergone several changes in its capital structure and ownership. This explains its rapid expansion from one quarter to the other, since the group is not totally new in the Mozambican market.

 

Perhaps more striking is the ascent of International Commercial & Engineering (ICE), who obtained its license only two years ago and whose position went from fifth to second during the first semester of the current year, its market share nearly quadrupling to 16.4%. It must be reminded, however, how ICE entered the Mozambican market.

ICE is re-emerging

In 1996, the company Baronscourt Holdings was formed, which later (in 2001) purchased 100% of Companhia Geral de Seguros de Moçambique’ s equity. In 2003, the group renamed itself Global Alliance Holdings, which was awarded an ‘A’ rating by Global Credit Ratings. In 2011 Global Alliance Mozambique was sold to Barclays Africa.

In the meantime, the insurer had received several licenses, notably in Ghana and Angola. Both regional arms were sold: Global Alliance Ghana to ACTIVA Group (in 2009) and Global Alliance Angola Seguros to COLINA Group (in 2013).

It was only in 2015 that the holding which owned Global Alliance Mozambique was renamed International Commercial and Engineering (ICE), the year the newly formed company obtained a composite insurer license in the country. Therefore, although ICE was legally created in 2015 it has been active there for more than 20 years.

Foreign-owned operators fuel the competition

While rankings in market shares among major actors are volatile, smaller entities, on the contrary, display a much more stable pattern, each gaining or losing one position maximum within a fiscal year or on an annual basis. The strong involvement of foreign-owned companies among recent entrants constitutes another characteristic of the Mozambican insurance market. Covering two million customers worldwide and present in Mozambique since 2014, Fidelidade, for instance, is a market leader in Portugal in both life and non-life segments.

Changes in claims costs between Q1 and Q2 2017

Changes in Claims Costs Q1-Q2 2017

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

 

Now part of the China-based Fosun International, Fidelidade has a global reach with a focus on fast-growing markets (such as Cape Verde, Angola, Macau), while owing a strong franchise in Spain, Luxembourg and France. It is interesting to note that its parent company Fosun made a failed attempt to acquire the Fabergé owner Gemfields for GBP 256 million, knowing that the UK-based AIM-listed company happens to mine for rubies and corundum in Mozambique.

Many of those foreign-owned companies are indeed focused on the non-life segment, in the search for relatively higher-margin clients, whose growth is linked to the development of the Mozambican extractive industry. Such is the case with Diamond Companhia de Seguros (Diamond), which started operations in March 2014 with the objective to act “specifically in non-life covers”, as the group states in its website.

The non-life segment remains the priority

Of the 14 insurance companies which featured in the ISSM’s 2016 Market Report, 10 were labelled as focusing on the non-life segment, although many also offer life products. We could also quote Hollard Mozambique, which opened its doors in 2001 and whose Hollard Vida, its life insurance subsidiary, started operating under a separate license in 2008.

As part of the global strategy of the group, Hollard Mozambique, owned by South Africa’s largest independent and privately-owned insurance company (Hollard Group), is involved in research and development that focuses on products for the low-income market segments. Such as mobile insurance, for example, where Hollard Mozambique is currently working on a project for the development of insurance products to be distributed through mobile money facilities.

Intermediaries are more stable in their rankings

The company also initiated various micro-credit life insurance products distributed through micro-finance distribution partners and is engaged in agricultural projects (‘Weather Index Insurance’) aimed at developing insurance products for small farmers in Mozambique.

Mozambican Insurance Intermediaries – Market Shares

Intermediaries Market Shares

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

 

Lastly, among intermediaries competition is quite high too, though variations in market shares are less pronounced than it is the case with major insurance companies. Fides continues to be number one, with a slight gain of market shares, passing from a level of 17.80% in the first three months of the year to 18.30% in the second quarter. Aris, which ranked second in the first quarter, now ranks third, its market shares having receded to 13% from 16.20% in the first quarter.

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