Growing middle class Africa draws insurers

London

A GROWING middle class in sub-Saharan Africa is enticing European and South African insurers to buy local firms focusing mainly on life insurance and pensions, in the face of mature markets and strong competition at home.

Rapid economic growth in countries such as Ghana, Kenya and Nigeria has increased the number of people with money to spend on insurance to protect their wealth, while regulatory changes are encouraging the growth of domestic savings and pensions.

Several major companies, including Swiss Re, Prudential and Sanlam, are buying insurers in Africa, with the focus on life and pension products in the more economically advanced sub-Saharan countries.

Notwithstanding the challenges, the race is definitely on. David Hodnett, Barclays Africa's deputy CEO, told a banking conference in Johannesburg in November: "Every insurer that you look at has probably about five or six suitors." A Standard Bank report published in August said while the size of the "middle class" in sub-Saharan Africa may have been overstated in some studies, growth rates…