Lloyd’s of London’s specialty insurance group, Chaucer, has formed a strategic partnership with France’s AXA to develop a new specialty insurance business in Africa, IntelligentInsurer reported.
Faced with low interest rates in the U.S and the euro zone, insurers are looking to emerging markets for growth, according to Reuters.
The insurance market in sub-Saharan Africa is increasingly attractive to global insurers thanks to dramatic and sustained economic expansion and demographic transformation, Ernst & Young reported.
African innovations such as mobile and cashless payments may soon disrupt developed insurance markets, according to EY.
Specialty insurance can cover anything from insuring oil rigs to footballers’ legs and currency inconvertability to political violence.
A 199-year-old company, AXA operates primarily in Western Europe, North America, Asia Pacific and the Middle East with a presence in Africa. AXA is a conglomerate of independently run businesses operated according to the regulations of different countries. The company is a component of the Euro Stoxx 50 stock market index.
The 328-year-old Lloyd’s is an insurance market in London that serves as a partially mutualized marketplace where multiple financial backers come together to pool and spread risk. These underwriters or members are corporations and private individuals.
The new entity, AXA Africa Speciality Risks, will insure risks in the political, energy and infrastructure sectors, according to a statement, ” LeFigaro reported.
Partnership with AXA’s African distribution network will help Chaucer extend its specialty underwriting reach and access more specialty business in this rapidly growing market, IntelligentInsurer reported.
Chaucer has a 12 percent share of Lloyd’s of London premiums written in Africa and is a market leader in African specialty insurance business. Chaucer will share the specialty business with AXA.
“This partnership highlights the growth opportunities that (Africa) provides,” said Johan Slabbert, CEO of Chaucer. “Our strategic alliance with AXA will deepen our access to the African marketplace, which will produce significant advantages for Chaucer in the years ahead.”
Partnering with Lloyd’s allows AXA to become a member of an esteemed community, said Denis Duverne, deputy CEO of the AXA Group. Under its banner, AXA will be able to “better serve the needs of policyholders and brokers in Africa.”
Africa’s specialty insurance market is growing and profitable, covering a range of political, energy and infrastructure risk, Reuters reported.
AXA, Europe’s second-largest insurer, has made several acquisitions in Africa since 2014 and currently operates in Cameroon, Egypt, Gabon, Ivory Coast, Morocco, Nigeria, Senegal and Algeria.
“We have an ambition for our turnover to rise rapidly,” Duverne said Tuesday, Reuters reported.
AXA will become a full-fledged member of Lloyd’s and benefit from the “real underwriting expertise” of the British group, its “long experience” in managing this type of partnership and “well-established relationships with its customers” such as banks, according to LeFigaro. The French insurer will bring skills in marketing, distribution and brand to the British group.