South African Insurers Seen by PwC Looking North for ExpansionKevin Crowley
Low growth in their home market is pushing South African insurers to look north to Kenya, Nigeria and Ghana for expansion, PricewaterhouseCoopers LLP said, citing a biennial survey of 31 industry executives.
Insurers are attracted by the countries’ projections of high economic growth, low insurance takeup and the expectation of increasing demand for policies, PwC said in the survey published in Johannesburg today.
“Expansion into the rest of Africa continues to be a key trend, with most of the major insurers focusing on selected high-growth markets,” Victor Muguto, long-term insurance leader for PwC Africa, said in a statement.
South Africa is suffering from the slowest growth since the 2009 recession with strikes at platinum mines and engineering companies forcing Finance Minister Nhlanhla Nene to cut the country’s annual growth forecast to 1.8 percent from 2.7 percent projected in February. While onerous regulation may be a barrier to entry into Ghana, Nigeria and Kenya, the countries’ long-term growth prospects are viewed as positive, PwC said.
“The survey comes at a time when South African insurers are grappling to adapt to a declining local economy and heavy regulatory requirements,” Muguto said.