Seamless risk protection for mega-projects: Mozambique

Infrastructure development is booming across Africa, due in no small part to significant economic growth and foreign direct investment. In line with this, and as part of Santam’s strategic expansion into Africa in partnership with Sanlam Emerging Markets, Santam Specialist Business has launched a Seamless insurance solution which offers comprehensive risk protection for mega-projects across Africa. In this series of articles, we speak to Karl Bishop, head: Niche Business at Santam, and explore the opportunities in individual African countries for infrastructure development and the specialist insurance business. This month, the spotlight falls on Mozambique.

Infrastructure for a growing economy

As South Africa’s eastern neighbour, Mozambique is one of our most important trading partners (26% of Mozambique’s imports come from South Africa, and 30% of its exports are to South Africa). 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. Furthermore, the country’s  proximity  as well as government’s commitment to facilitating private sector participation in infrastructure development enhances the ease of South African companies doing business in Mozambique, says Karl.

“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.”

Karl 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. However, poor world commodity prices are slowing down investment inflows into new projects.”

Opportunities for specialist insurance

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, explains Karl.

“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.”

Why insure with Santam Specialist Business?

Karl 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 to mitigate those risks.”

The expertise, offered by Santam Specialist Business, which is most suited to the Mozambican market includes:

• Engineering all-risk, construction all-risk, project liability insurance – targeting both large infrastructure and smaller, sector-specific commercial construction projects.
• Specialised commercial property insurance.
• Marine cargo and transit insurance targeting the movement of goods in and out of the port areas.
• Project guarantees for advance payments received by contractors and project performance guarantees.
• Travel insurance targeting commercial clients.
• Aviation insurance targeting helicopters and light commercial aircraft.

Opportunities for Seamless specialist insurance in Mozambique

Karl believes convenience and appropriate risk identification are vital when placing cover for 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.”

Policies are issued and administered by Mirabilis Engineering Underwriting Managers, which covers all aspects of a project by distributing comprehensive cover and manages the entire process from policy issuing to claims handling and processing. 

“We are marketing our Seamless solution through corporate and commercial broker firms, since clients in the specialist business sector expect to work with intermediaries and insurers that understand their needs and offer bespoke risk management solutions that are appropriate at different stages of their business journey.  

“With the increased activity in development and infrastructure projects, Santam’s Seamless insurance solution – the first of its kind in Africa – is perfectly suited to the Mozambican market. The product caters for both medium and large projects and provides clients and intermediaries with a single policy and single point of contact throughout the project life cycle,” concludes Karl. Visit the Broker Services page where you will find useful videos, training documents and articles that can make your life easier. For more advice and tools to grow your business visit our intermediary advice page.

For more advice and tools to grow your business visit our intermediary advice page.