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Insurance trends for the High-Net-Worth Sector

by Media Xpose

The 2024 Africa Wealth Report, a collaboration between Henley & Partners and New World Wealth, recently published, reveals that Africa’s total investable wealth stands at $2.5 trillion. Key insights from the report include that South Africa remains the wealthiest country on the continent, hosting 37400 millionaires, followed by Egypt, Nigeria, Kenya, Morocco, and others. Looking ahead, Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda are all projected to see significant growth in their millionaire populations by over 80% by 2033.  The report forecasts substantial growth in millionaire populations in cities like Cape Town, the Whale Coast, Kigali, Windhoek, Swakopmund, Nairobi, Tangier, and Marrakech.   

“The report’s findings mirror the trends we are seeing, with semi-gration being significant amongst the affluent,” says Tarina Vlok, MD of Elite Risk Acceptances, a leading high-net worth insurer and subsidiary of Old Mutual Insure.

She adds that the insurer continues to see an uptick in insurance demand in areas like the Whale Coast, the Cape Winelands, the Garden Route (Plettenberg Bay in particular) and others.

The report also discusses South Africa’s position in the global luxury real estate market, highlighting its young population and rapid urbanisation as key factors boosting the demand for luxury properties. It adds that ultra-high-net-worth individuals are increasingly building their lives along international wealth corridors, shaped by their lifestyle, geographic preferences, and legal and regulatory frameworks.

“There are many African millionaires choosing to buy luxury property in areas like the Atlantic Seaboard, as Cape Town is still a location of choice worldwide for the affluent. This presents good future opportunity for brokers and insurers,” says Vlok.

However, she adds that for those with assets like property and cars across multiple jurisdictions, it is important to work with “specialist insurers in the country where that property is located.”

Another insight from the report is that Africa’s millionaire population set to rise 65% in the next decade. Vlok says that there are pockets of opportunity that are revealing themselves on the continent, and this is in turn likely to unlock growth for insurers who have an established African footprint.

“When we think of growth, areas like Mauritius comes to mind, however, we have also noted demand from Zimbabwe. These gaps are creating an opportunity for insurers who have a reputation for a differentiated and bespoke product offering,” says Vlok.

Against this climate, Vlok reminds brokers that they need to stay close to insurers and remind policyholders that they must choose their insurance provider carefully. Not all high-net worth insurers are created equal.

“There are opportunities for brokers within the semi-gration trend, but it’s important to understand how to service clients; services in the affluent areas of Johannesburg are not the same as in small coastal towns like Hermanus or Paternoster, for example,” says Vlok. “Work with the insurer to tap into their service networks.”

She also reminds brokers that now is a good time remind policyholders about their responsibilities ahead of winter, especially given that climate change and changing weather patterns are causing significant challenges for insurers and drastically changing the risk landscape.  

“One of the top reasons claims are rejected is because the loss is not unforeseen, but rather because of poor maintenance,” says Vlok. “Policyholders must regularly inspect gutters, roofs and exterior walls of their homes for debris, leaks or poor condition and attend to problem areas. Tyres, windscreens and cars must also be checked before the wet, frost and icy weather conditions set in.”

She adds that the role of the relationship between broker and insurer will continue to be important against the current uncertain landscape.

“We are transitioning from payer to proactive partner: Relationships with brokers are based on true collaboration and partnership, with the goal of delivering value to our mutual clients.”

She adds that it is the responsibility of the insured to look after their possessions, which will in turn allow the specialist insurer take care of their assets. However, the trick is in finding the right specialist insurer, with relationships and accessibility being cornerstones of the partnership.

“Find a specialist insurer that understands the unique needs of the HNWI and that has the backing of an established blue-chip brand, which has the know-how to quickly and elegantly respond when something goes wrong.”

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