Mervyn Cookson: “South Africa can learn from Mauritius’ good institutional developments”

The insurance sector is witnessing new developments followling ther merger in South Africa of two insurance groups, namely Metropolitan International and Momentum, which has a branch in Mauritius. The new entity, MMI Holdings, has acquired a 70% stake in Mauritian Eagle Life. The CEO of Metropolitan International expounds on these changes.

BUSINESSMAG. What is the idea behind the partnership with Mauritian Eagle Life and the rebranding of Momentum Mauritius?

The fusion of Metropolitan International and Momentum has expanded our reach to 12 countries in the Sub-Saharan African region including Mauritius, through Momentum’s health insurance business here. We have had a very good start establishing ourselves as a health insurance administrator possessing administrative capability and the technical know-how required.

We then decided to expand our line of products by diversifying into life insurance as well, with Mauritian Eagle Life. Rather than starting from scratch, Metropolitan International set out to acquire a life insurance company on the island and fortunately, a significant taking in Mauritian Eagle Life, which is part of the IBL and GML groups, was available. The deal has been concluded from April 1, 2013.

Regulatory approval to rebrand both companies in Mauritius has been received. However, we will cobrand our life company with Mauritian Eagle Life for about a year, given that the latter is a fairly established brand with 23 years of presence on the Mauritian market.

BUSINESSMAG. How was the choice of Mauritian Eagle Life made?

Our management team here carried out some fieldwork to identify which insurance company would be a good acquisition here. It was partly our good fortune that Mauritian Eagle Life was available, since they had embarked upon a strategy to realign their business in Mauritius. They were on the lookout for an international partner and the timing was thus perfect for Metropolitan International to step in. We are very pleased with the outcome of this partnership.

I must stress that this is the first time that a Mauritian insurance company has entered into a partnership with a foreign insurance partner. This represents a first step towards demarcating ourselves in order to grow the company.

BUSINESSMAG. What is the vision of this new entity and what does it represent for your clients?

When we had started the health insurance in Mauritius as Momentum Health six years ago, we were the pioneers of a lot of innovation in the market. We were the first to introduce cashless transactions on insurance payments. We enabled our clients the possibility to access their accounts online in order to check their benefits and see the clauses of claims payments. We also innovated by introducing a chronic illness medication division.

Metropolitan International believes that powered with our innovative life insurance know-how, we will be able to bring innovative products to the insurance market. The Mauritian market, at a glance, is a very traditional one in terms of financial services products. We will be introducing very innovative products to meet the needs of clients from an investment savings point of view and a risks point of view as well.

BUSINESSMAG. The local insurance sector witnessed a few mergers recently. Could this imply that stakeholders of the insurance industry are having trouble surviving on their own these days?

I think for us, in South Africa, we were ranked fourth or fifth in the insurance market. We would have survived on our own. However, when the opportunity to take over Momentum arose, it just made good business sense to merge the two companies in order to possess a greater market share across Africa and thus a greater geographical footprint. It was not a question of being forced to merge the two businesses because of the financial crisis; it was more one of the greater business benefits that presented themselves.

Specific to Mauritius, we are looking into becoming a player in the pension fund administration market given that pension legislation has changed recently. We are looking into asset management as well and will be developing these products gradually.

BUSINESSMAG. Several insurance companies in Mauritius are listed on the SEM. Is Metropolitan considering that option as well?

Metropolitan International is not saying no to a future listing; our shareowners in Mauritius do possess significant amounts of capital in order to fund any future expansion in that direction. However, we first want to grow our company to a sizeable scale in the country.

BUSINESSMAG. On a regional note, South Africa is considered to be Mauritius’ direct rival in the region. What is your view on this?

Mauritius tops the Mo Ibrahim Index in Sub-Saharan Africa owing to its legislations and measures put in place to attract Foreign Direct Investment. With regards to South Africa, we certainly are the biggest economy in Africa. However, there are other economies that are growing at a rapid pace. In my opinion, South Africa can learn from the good institutional developments you have got here. We, in return, can bring our technical know-how along with our history of establishing good businesses as well.