Mozambique: Insurance market generated more than €316 million in gross premiums last year

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Mozambique: Insurance market generated more than €316 million in gross premiums last year

2:31 CAT | 29 Oct 2024

File photo: Domingo

The Mozambican insurance market generated more than €316 million in gross premiums in 2023, a slight drop compared to the previous year’s record, according to data from the Bank of Mozambique accessed by Lusa today.

According to a report by the central bank on financial inclusion, the Mozambican insurance market in 2022 generated gross premiums of 21.885 million meticais (€317 million), a record, falling slightly last year to almost 21.841 million meticais (€316.3 million).

In the same period, insurance activity in Mozambique generated premiums of 18,502 million meticais (€268 million) in the Non-Life segment and almost 3,339 million meticais (€48.3 million) in the Life segment.

In 2023, 17 insurance companies operated in Mozambique, of which 12 operated in the Non-Life segment, two focused exclusively on the Life segment and three operated in both segments simultaneously.

According to the Bank of Mozambique report, the country had three micro-insurers, one reinsurer, eight pension fund management companies, 145 insurance brokers, five reinsurance brokers and 31 commercial company agents,.

“In nominal terms, by the end of 2023 the insurance market had contracted by around 0.2% compared to the same period in 2022,” the document states, noting that the insurance penetration rate in the economy stood at 2.03%.

Meanwhile, this month, Mozambique’s Competition Regulatory Authority (ARC) authorised the purchase of Global Alliance Seguros, one of the country’s main insurers, by the insurer Hollard Moçambique, which now dominates the market with a 31.7% share.

The ARC’s decision states that the regulatory body’s board of directors unanimously decided “to adopt the decision not to oppose the present merger” […] “since it is not likely to create significant barriers to effective competition in the national insurance supply market in the life and non-life branches, in related markets or in a substantial part of them”.

In the document, the ARC states that it consulted the Mozambique Insurance Supervision Institute (ISSM) to make this decision, and also admits that the “post-transaction scenario” analysed is “indicative of a moderately concentrated sector”, but that “it is not foreseeable” that it “will restrict competition in the Mozambican insurance market”.

When analysing the accumulated market shares in the life and non-life insurance sectors in Mozambique, the ARC concluded that the Hollard group holds the largest market share, with 19.1%, followed by Fidelidade, with 14.80%, the state-owned Emose, with 14.5%, and Global Alliance, with 12.6%.

“Although the acquirer’s market share in the post-transaction scenario is below 50%, a horizontal concentration operation may, in the long term, lead to a dominant position in the market by the main operators in the insurance sector,” the document from the regulator also points out. An analysis of the concentration index supported the decision not to oppose the takeover.

The state-owned insurer Empresa Moçambicana de Seguros (Emose) had been the leader of the national market for over 40 years, but in 2023, according to data from its report and accounts, it lost market share to sector leader Hollard (while itself remaining at 14.4%) and to the Portuguese company, Fidelidade (14.8%).

Source: Lusa