Africa-centric insurer poised for emerging market growth

As more and more multinationals identify South Africa as their base for the penetration of the greater African market – with the country’s membership of Brics adding further impetus to this trend – insurance giant Aon sees Africa as the new frontier of insurance. “Through its enlarged presence in South Africa and its network of offices in the sub-continent, the company is well poised to provide a full spectrum of services to this burgeoning market,” said Aon South Africa CEO Anton Roux. “Large insurers’ growing interest in Africa is an indication of the sea change in attitudes towards prospects for the continent,” said Roux, who believes that Aon, with its strong representation in 14 African countries, is well placed to meet the insurance needs of the market. “There remains a lingering perception that trade with and investment in Africa is fraught with risk. Fundamentally however nothing is uninsurable provided it’s associated with risk management and adequate scoping of covers such as export short term insurance, political risk, credit cover, marine and aviation cover, and so on.” While credit and political risks remain proportionally higher than when dealing with the developed world, reducing that risk through insurance instruments is entirely possible, says Roux. “It’s essential of course to have an affinity with trade in African markets and an understanding of the intricacies of insurance in those markets, with their varying degrees of sophistication and transparency. “For instance where a country has insufficient foreign exchange and the forex controls are stringent it’s possible to nominate a convertible currency in which to take cover. “In terms of insurability it comes down to the quality of the deal involved and in terms of trade with Africa this has to do mainly with the company and the country rather than the size of either.” Necessary cover also varies on a country-by-country basis and even a case-by-case basis, he adds. In many instances it’s preferable, for example, for a South African importer or exporter to manage their insurance risks within the South African market and to consolidate all their trade risk into a single insurance package including transit and commercial risks. The bottom line is that advice is crucial to the success of exploring the African markets. “Insurance requirements frequently have a particular risk profile, requiring a tailor-made approach to cover, taking into account the numerous relevant local factors.” And while challenges remain and risk on the continent will continue to evolve, Roux believes the opportunities are enormous. “It’s a little-known fact, for example, that Mozambique’s Tete province has the largest untapped coal reserves in the world,” he said. CAPTION Anton Roux … nothing is uninsurable.