A growing player in Angola’s dynamic insurance market

Angola

Rui Alves, general manager of STA Seguros, talks to The Energy Year about Angola’s updated oil and gas coinsurance regime and the company’s activities and growth targets in the market. STA Seguros provides insurance products to individual and corporate clients in Angola, including oil and gas companies.

What are your views on the recently updated oil and gas coinsurance regime led by ENSA?
The coinsurance regime is a positive move, as we can now share the risk for large projects. For instance, we sometimes receive calls to cover the risk for FPSOs, industrial plants and aeroplanes. Normally the insurance package is channelled through ENSA, which in turn shares the risk with the companies within the coinsurance scheme.
STA Seguros is part of this coinsurance regime. It’s my expectation that ENSA will lead this scheme until the country has a local reinsurer that can eventually take the bulk of the risk on its balance. There is a plan to establish an entity in the country, and the president recently signed a decree to start the process of creating this national reinsurance company.

What is STA Seguros’ strategy to further penetrate the oil and gas sector?
We work directly with oil and gas clients such as Sonils, Angola Environmental Serviços, Algoa and others. Five years ago, we set up a five-year business plan, assisted by Deloitte, with the goal of penetrating the market in small steps because we are not too big. We don’t want to have significant business exposure because it will oblige us to grow too fast. Our strategy is not to be in the top five oil and gas insurers, at least for now, but we’ll be in the top 10.

In 2021, the national insurance market broke a new record, with around AOA 271.3 billion (USD 617.6 million) issued. What key factors allowed for this growth?
The market is growing fast. The regulator, ARSEG, is now much more involved in the market itself with all the insurance companies here. They check to see that each company is properly funded and working within the limits of the law and place special attention on solvency margins and share capital.
One important point to note is the recent modification of the required share capital an insurance company needs in order to operate. Before this new regulation, the share capital was measured in US dollars, which became very inefficient given the recent variations in the currency exchange. Therefore, they matched the share capital requirements to a US dollar spot rate, and they used this as a benchmark to calculate the share capital all companies should have. However, with the new regulation, I believe that they will establish the new share capital minimum at USD 5 million, which is a target STA Seguros would fulfil.

How have the recent improvements to Angolan monetary and currency policy affected local insurance companies’ ability to work alongside international partners?
The problem in the past was the lack of circulation of foreign currency, which almost banned us from transferring euros or US dollars abroad and made it difficult to fulfil our policy commitments with outside companies.
This situation is now much more stable, which gives local companies more credibility with foreign companies. Now that we have a more stable currency, we can easily pay our reinsurance partners.

What are the fastest-growing insurance products in Angola?
Three segments are very common in all companies: health, work accidents, and automobiles and travel. As is the case for most insurers, health remains our best-performing product. Regarding life insurance, we cover more than 10,000 lives. After completely stopping in the past few years, travel is now growing. We have a lot of insurance for construction and infrastructure development, and we see a lot of growth in this segment.
Within the last year, STA has seen growth in all segments, especially workers’ compensation insurance, a product that companies are obliged by law to buy to protect their employees. Another star product was automobile insurance, which fits in perfectly with our strategy of not having agencies, as automotive is a retail product sold door to door.

How has the company’s strategy changed over the years?
The company is focused on having a lean cost structure and working through third-party partners and brokers. We don’t have agencies, and we are growing as an all-round insurance provider, even door to door. This was not the initial idea behind STA. We intended to work mostly business-to-business dealing especially with private companies, not via the retail market. However, the market in the past three years changed in ways we did not predict five or six years ago, so we had to adjust. But our numbers are showing we are growing. Based on our progress, we’ll soon be among the top 10 insurance companies in Angola.

What are the key points in working with insurance brokers?
Having a broker is like having someone protecting your interests and doing part of your work. For a broker to bring business to us, they have to understand and trust our company because, at the end of the day, they bring us their contacts and clients. As brokers work for several companies, they have to decide which ones they give more business to. The percentage of claims is a key aspect in this. In our 2021 claim report from ARSEG, STA Seguros had zero claims. Our solvency margin is around 163%. This is important to build trust among partners. This is the way that we work with third companies.

What have been your latest digitisation innovations?
We are the first Angolan company that automatically sends all product documentation on WhatsApp upon receiving an insurance payment. It is completely automatic. While other companies need to call or email their clients, we have digitalised this type of communication, which facilitates and expedites the whole process. In the case that the client doesn’t have WhatsApp, they receive an SMS with a download link, or we can call them.

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