By: Richard Hood, CEO of Olea South Africa
It’s unsurprising that South African companies across all sectors are expanding into Africa. When you consider the GDP growth of 0.4% locally, versus Sub-Saharan Africa’s economic growth of 3.6%, it makes sense to do business in these emerging markets. In addition, barriers to entry for business in Africa are far less stringent than those in Europe.
This trend has been accelerated post-Covid and in light of the war in Ukraine. Leveraging opportunities on the African continent is not only astute but logical, and has been a focus for private equity companies and private investors.
However, doing business in Sub-Saharan Africa requires intimate knowledge of the insurance legislation and regulation. At the end of July, Apio Group rebranded to Olea South Africa after becoming part of Olea Group of companies in 2021. Olea’s unique selling point (USP) is that it’s the only Pan-African broking business in South Africa, with an extensive footprint operating in North, West, Central, East and Southern Africa (24 territories in total). Olea South Africa offers a blend of South African expertise and market capacity, with locally based servicing capability for both domestic and cross-border operations. In addition, the globalisation of business includes a head office in Paris and a strong African presence.
Why a South African portal for insurance in Sub-Saharan Africa?
We provide service to companies investing in Africa, as well as local brokers not established on the continent. South Africa’s financial system is highly developed and advanced technologically. This supports clients going into Africa who need to comply with local legislation but want full access to SA capacity and capability.
The advantage of having a physical presence in each territory allows us to structure integrated solutions that accommodate regulatory requirements. Olea South Africa is a viable alternative to the traditional corporate insurance brokers in Africa through our extensive network, led by owner-managed businesses, which brings a different culture and client engagement.
Through Olea, clients can reinsure into the South African market. Customers wanting to go into Sub-Saharan Africa still access South Africa’s insurance capacity. If a company invests in multiple countries, it can be quite fragmented dealing with different partners and brokers. We are able to leverage Olea’s buying potential, through an integrated programme that provides economies of scale, efficiency and uniformity. Obviously, all legal aspects and compliance will be respected, thanks to our local presence.
Interestingly, 70% of insurance premiums on the African continent are paid
in South Africa. This is due to a greater scope of products and it’s an ideal
platform from which to reinsure into the South African market if a specific
offering is not available.
Olea is a member of the Financial Intermediaries Association (FIA) which represents the top insurance brokers in South Africa. We are committed to upholding FIA’s constitution and respecting its Code of Conduct. In addition, the company belongs to the French South African Chamber of Commerce.
The growth of the insurance industry in Africa is exponential, not only due to a burgeoning middle class but because expectations have changed. Employees are pushing for greater benefits in Sub-Saharan Africa – in fact, demanding them. Ten years ago, medical insurance in Sub-Saharan Africa was considered a benefit by employees. Currently, this is accepted as a ‘given’. The same applies now to life insurance – it wasn’t a high priority and, if offered, would be considered a benefit. In 2021, Africa’s insurance premiums (life and non-life) amounted to $74bn. This continues to expand, creating more opportunities for business and the concomitant insurance – whether it be in construction, mining or the concomitant insurance – whether it be in construction, mining or the transport industry.
