Santam introduces seamless insurance solution to Mozambique

"Mozambique is one of South Africa's most important trading partners. South African companies expanding into neighbouring territories have done well in Mozambique, and there is reciprocal benefit from our exportation of business expertise to Mozambique," says Karl Bishop, head of Niche Business at Santam.

Karl Bishop, head of Niche Business at Santam

"The infrastructure development potential in Mozambique is huge in all sectors - roads and rail, energy, telecommunications, water and sanitation, and agriculture. The largest natural gas deposits in Africa are just offshore in Pemba, and the Nacala Development Corridor is one of the anticipated inter-regional road projects linking Mozambique to Tanzania, Malawi and Zambia," he says.

Bishop says the Nacala Airport Project, currently in an early development stage, will spin off several peripheral development projects in hospitality, retail, education and manufacturing. "Large mining concessions (VALE and Rio Tinto) are already in operation in northern Mozambique, with many South African companies providing specialist services and capital goods. Poor world commodity prices are slowing down investment inflows into new projects, however."

Underdeveloped market

Although the specialist insurance market in Mozambique is currently underdeveloped, there are opportunities resulting from economic growth and the government's focus on infrastructure investment.

"Much of the specialist insurance placements for large projects are taken by offshore syndicates, to the detriment of the local market. However, Santam Specialist UMA brands do have a commanding presence in locally placed insurances and reinsurances. Santam Specialist currently writes more than 16% of its African gross written premiums from Mozambique," Bishop says.

Mega-infrastructure projects, such as dams, transport infrastructure, and renewable energy projects and plants have massive price tags with equally large insurable risks. "They require innovation, a high level of underwriting expertise and the special technical knowledge of a large insurer to effectively mitigate risk.
"Santam Specialist Business provides all these and more. We constitute teams of underwriting managers who are all experts in their respective fields, with a keen focus on entrepreneurial and big-thinking ideas. We are able to identify opportunities or threats to clients and, in turn, offer tailor-made solutions in order to mitigate those risks."

Risk identification

Bishop believes convenience and appropriate risk identification are vital when placing cover for complex mega-projects. "However, projects of this size are extremely complex - cover may be required for public liability, professional indemnity, marine insurance, contract works, project delays, assets, travel insurance and riot cover, for example.

"The basis of our seamless insurance solution is that it covers all bases of insurance via a single touch-point - the client, whether the insured or an intermediary, does not have to deal with a number of different insurance parties and risk gaps in cover.

"With the increased activity in development and infrastructure projects, Santam's seamless insurance solution is perfectly suited to the Mozambican market. The product caters for both medium and large projects and provides clients and brokers with a single policy and single point of contact throughout the project life cycle," concludes Bishop.