Seamless risk protection for mega-projects: Angola

Karl Bishop, Head Niche Business at Santam.

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 Angola.

Infrastructure for a growing economy

Angola is currently in the throes of extensively rehabilitating and rebuilding the country and economy subsequent to the 2002 cessation of a devastating three-decade civil war that claimed more than a million lives. The war also destroyed much of the country’s infrastructure.

Angola’s abundance of natural resources has made it a leading destination for foreign direct investment over the years. There has been significant investment into increasing diamond mine production as well as other downstream industries and service sectors including refineries, road and rail transport, ICT and renewable energy generation. The pressure to close the infrastructure gap is currently immense.

“South Africa is Angola’s strategic trade partner, fourth behind China, the USA and France, according to the World Bank. Business opportunities present themselves in the economic activity tied in with the exploitation of the country’s natural resources, and the anticipated future economic activity linked to infrastructure project development,” says Karl.

Opportunities for specialist insurance

“The pressure to close the infrastructure gap and enable economic diversification in Angola has created sizable opportunities in recent years for Santam Specialist Business, particularly in engineering, property, liability and marine, by following South African corporates expanding operations into Angola.

“Furthermore, the local insurance market’s need for reinsurance support favours Santam Specialist Business, which has the necessary large risk-carrying capacity,” Karl says.

Santam’s interests in Angola are via the new partnership of Sanlam Emerging Markets (SEM) with Saham subsidiary Global Alliance. Santam Specialist has, however, had a long-standing working relationship with Global Alliance since before the launch of the Saham/SEM partnership. “The formalisation of the partnership will enhance Santam’s ability to access more opportunities in a regulatory environment that is likely to be more restrictive for non-admitted insurance business.”

Why insure with Santam Specialist Business?

Karl says mega-infrastructure projects, such as 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 in order to mitigate those risks.”

Which areas of Santam Specialist Business are most suited to the Angolan market? Karl says the Angolan infrastructure development programme puts engineering, and bonds and guarantees businesses, at the forefront of opportunity in the market. With Santam’s Seamless policy offering, there is also opportunity for marine and project liability business. And as infrastructure projects are completed and become operational assets, there is also scope for property businesses.

“The other opportunity lies with the insurance of South African retail and manufacturing firms setting up operations in Angola. They not only need assets cover, but also marine cargo and liability as they move their supplies to market in-country and in the region,” Karl says.

Opportunities for Seamless Specialist Insurance in Angola

Karl believes convenience and appropriate risk identification are vital when placing cover for complex 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 Angolan market. The product caters for both medium and large projects and provides clients and brokers with a single policy and single point of contact throughout the project life cycle,” concludes Karl.