External growth for all

Everyone is rushing. Mergers and acquisitions, alliances, partnerships, all scenarios coexist provided that the relevant financial resources are available. The race against the clock is not at the reach of everyone. Only players who combine financial strength, technological expertise and network can venture.

The Middle East is also coveted. The 2008 global economic crisis has accelerated the process of rebuilding the market. Control of insurance business continues to be organized whereas the traditional sector is facing the emergence of new players such as takaful insurers.

The “race to the market share” has overshadowed the notion of profitability, with technical results being nowhere near shareholders’ satisfaction. This kind of vulnerability is conducive to a future concentration.

Africa is no exception. The insurance sector is small and strained by its low capitalization and fierce competition prompted by the existence of a plethora of companies, which on their turn, have to sustain successive recovery plans that confined their role to motor and health risks underwriters.

Such companies have no other option but to find capital to strengthen their shareholder’s equity and get away from the turbulence. Being vulnerable, they are easy prey in a continent that is no longer, the monopoly of some major international groups. The African market is more open than ever to South African, Moroccan, Kenyan, and Nigerian insurers looking forward to boosting their external growth.