Growth through specialisation in Mozambique’s insurance sector

Mozambique

Henri Mittermayer, CEO of Hollard Mozambique, talks to The Energy Year about the company’s strategy for expanding its market share and the challenges of insuring Mozambique’s large-scale energy projects. Hollard is a South African privately owned insurance group that offers life and short-term insurance and investment products.

How do you assess the business environment for insurance companies in Mozambique?
In Mozambique’s rapidly evolving economic landscape, the insurance sector has emerged as a key component of the financial services industry. Insurance supports economic growth by promoting risk management, facilitating investments, supporting trade, providing social protection and contributing to financial market development. These functions collectively stabilise and propel the economy, making insurance essential to the development of emerging markets like Mozambique.
The Mozambican insurance market is still in its nascent stage, reflecting the broader growth trajectory of the national economy. With significant potential investments on the horizon, particularly in the energy and infrastructure sectors, locally sourced insurance – complemented by international A-rated reinsurance capital – is positioned to play a crucial role in Mozambique’s journey toward value creation and wealth accumulation.
However, Mozambique remains an underinsured market. Currently, foreign investment drives much of the demand for insurance as a risk management tool. At Hollard, we are committed to fostering local financial inclusion, particularly by supporting entrepreneurs and SMEs across all sectors, with a special focus on the vital agricultural industry.

What has been Hollard’s experience navigating the Mozambican market?
Since entering the Mozambican market in 2001, Hollard has pursued a strategy of steady and sustainable growth, securing a considerable market share. Our presence here is grounded in a long-term vision to contribute to a stronger, more resilient, customer-centric insurance ecosystem.
Hollard Mozambique’s roadmap includes leveraging cutting-edge technology to streamline processes, enhance accessibility and improve the overall customer experience. Additionally, we are deeply committed to positively impacting local communities through initiatives focused on education, healthcare, and environmental sustainability, contributing to Mozambique’s socio-economic development.

What are the dynamics specifically within the oil and gas sector?
Mozambique’s oil and gas sector presents both significant challenges and opportunities. The local insurance market is still developing and not yet fully equipped to handle the immense capital investments of large corporations. This situation necessitates international insurers and reinsurance capacity. Major energy assets, such as those owned by international investors, do not yet fully generate risk premiums within the local market. This is why Hollard advocates for legislative changes that would link reinsurance more closely with local capabilities, recognising its importance for Mozambique’s long-term economic goals.

How important is reinsurance for energy companies?
In the insurance value chain, reinsurance is indispensable, especially for the large-scale projects typical of the energy sector. Hollard has long championed the need for dynamic and flexible legislation that enables companies to effectively manage various risks. While reinsurance may involve some foreign currency outflows, it is also a vital mechanism for ensuring adequate capital coverage for high-value assets.
Mozambican insurers, with their emerging balance sheets, require access to A-rated international reinsurance capital to cover large energy projects and infrastructure. This need underscores the importance of developing a robust reinsurance legislative framework to support Mozambique’s economic ambitions.

How is Hollard structuring its business to help companies mitigate these risks?
Mozambique’s unique risk landscape, characterised by insurgency activities in the north and frequent natural disasters, demands specialised insurance solutions. Over the years, Hollard has developed extensive expertise in commercial insurance, liability, engineering and employee benefits, setting us apart in the Mozambican market.
Our vision extends beyond mere market participation; we aim to cultivate a vibrant middle-class insurance consumer base, similar to those in more mature economies. Hollard’s mission is to empower individuals and businesses to secure a better future, optimising opportunities for creating value and wealth in Mozambique. As we look to the future, we remain steadfast in our commitment to playing a pivotal role in the continued development and growth of this promising market.

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