Insurance firm builds business in Africa

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Paul Lewis, PFP Insurance Brokers executive responsible for business development in Africa, says that the South African market should support Africa in its quest for growth

The African Insurance market is booming and there are increasing opportunities for local brokers to assist African insurers requiring access to capacity for large corporate risks and for fronting arrangements for risks that are excluded under their treaties. Paul Lewis, PFP Insurance Brokers executive responsible for business development in Africa, says that the South African market should support Africa in its quest for growth.
Lewis has extensive experience in the East African market, particularly in Kenya and Tanzania, and says that apart from major commodities-related projects sub-Saharan Africa is the scene of some of the most exciting infrastructure schemes anywhere outside of China and the Gulf. These range on the Western front from the new international airport just outside Dakar, which will serve as a gateway to the entire West African Region at an estimated cost of US$1bn; to the new refinery schemes in Nigeria; to the construction of a US$100mn shopping mall as well as an ongoing electrification programme and rail programme in that area.
In the East, Kenya is also booming as well as neighbouring South Sudan, Uganda and Nairobi. Lewis says the discovery of oil and gas and good growth rates in Africa, particularly in East Africa and Mozambique, have definitely driven increased demand for insurance products and capacity with a number of large construction projects offering major opportunities for both the SA and UK insurance markets to bring their expertise and capacity.
“There is a definite need for access to specialist insurance markets for specialist business lines such as liability and casualty and energy. We believe the considerable technical expertise housed in SA across all lines of business can be mobilised to the benefit of these African partners. Marine and cross-border cover is another specialist area requiring additional capacity and specialised markets which are not available locally. PFP Insurance Brokers has, for example, recently placed cover for a flying ambulance service. This risk was interesting because we were able to get more favourable pricing in the South African market and we were able to use our technical expertise to advise the client on gaps in their existing cover. We were also able to access a wider range of markets, having placed the medical malpractice cover in London. This ensured that the programme was not only technically correct but also sensitive to cost,” notes Lewis.
Another project involves covering a fleet of ferries that travel between Zanzibar and the mainland and a fleet of barges that travel on the rivers in the Congo. The local African insurance market often does not have sufficient capacity to support certain risks so they have to be placed in either the South African and/or the London markets with top rated insurers. African insurance markets also can’t offer the same scope of cover as the SA and UK markets.
Lewis says there are a number of other areas where SA’s experience can add value. As the African insurance markets grow in sophistication, overall risk management strategies will, for example, develop in complexity and there will be a growing need to dovetail the insurance placement with the overall risk management strategy. He notes that, at present, the lack of all round technical knowledge and skills and a slightly unrealistic dependence on price is slowing down the structuring of insurance deals. Unfortunately innovation and the breadth of cover being placed are seen as secondary to price.
“We are confident however that this will change in time. Success will be gauged by one’s ability to offer a consistent and professional service in partnership with selected partners in Africa which benefits them by giving added value and expanding their own offering,” concludes Lewis.

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