Report Coverage
This report focuses on life insurance, reinsurance and short-term insurance, including travel insurance, in Botswana. There is comprehensive information on the size and state of the industry, companies operating in the sector, their total assets and gross premiums (2018 figures) and factors that influence the insurance industry. There are profiles of 26 companies including the dominant player BIHL, the only major insurance company listed on the Botswana Stock Exchange and Letshego Holdings, a player in the microinsurance sector, which is also listed. Other profiles include Botswana Insurance Company, which notified Botswana’s Competition Authority of the proposed acquisition of BIHL Insurance Company Ltd, trading as Legal Guard, a BIHL subsidiary.
Introduction
This report focuses on life insurance, reinsurance and short-term insurance, including travel insurance, in Botswana. The insurance sector contributed 3.5% to the country’s economy in 2018. Total gross written premiums increased by 8% from P5bn (pula) (US$416.4m) in 2017 to P5.4bn (US$485.5m) in 2018. Non-bank Financial Institutions Regulatory Authority (Nbfira) data shows total assets of reinsurers and insurers decreased by 19.3% to P19.01bn in 2018 from P23.6bn in 2017. The dominant player is Botswana Insurance Holdings Limited (BIHL Group), in which South Africa’s Sanlam has a 59% shareholding. BIHL’s market share in 2018 was 83.1% (P15.8bn) of the total assets of the industry. South African insurance companies and banks have a significant presence in Botswana’s insurance industry. The life insurance sector continued to hold the largest market share in 2018 in terms of total assets and total gross written premiums.
Strengths
• Major South African insurance companies have a strong presence and bring with them skills and experience.
• New legislation promotes the use of local insurance companies and agents.
• The industry is well-capitalised and financially sound.
• The new competition regulatory framework will encourage competition.
• The regulatory environment is strengthened through new legislation.
Weaknesses
• Constrained performance by non-life insurance and reinsurance.
• Dominance of one player.
• High unemployment rate and poverty.
• Lack of financial literacy precludes some low-income consumers from buying insurance.
• Lack of new entrants in short- and long-term insurance sectors.
• Penetration of the market is low and the level of underinsurance remains high.
• Shortage of skills for new technologies.
• Slowing economic growth affects consumers’ disposable income.
• The economy is vulnerable to the poor economic performance of neighbouring countries.
Opportunities
• Low penetration rate of small businesses means there are opportunities to sell insurance.
• Partnerships with technology companies present new distribution channels.
• The emerging urbanised middle class, both locally and across sub-Saharan Africa, represents a valuable pool of potential new policyholders.
• The low-income market presents growth opportunities for microinsurance products.
Threats
• Extreme weather conditions will increase pressure on short-term insurance premiums.
• Insurance companies host databases with sensitive client data and as such they are targets of cybercrime.
Outlook
Macroeconomic conditions will be a determining factor in the pace of industry growth. While the low penetration rate presents growth opportunities in all the classes of insurance, low economic growth will continue to affect disposable income. Improvement in the unemployment rate will expand the potential customer base for insurance products. Commentators say that insurance companies will innovate more in their route to market, to ensure they meet needs of customers with regard to technology preferences and to provide tailored products to low-income consumers. Innovation will be accompanied by investment into ever more sophisticated technology systems and people with the required skills. The trend of insurance, banking and technology becoming increasingly more integrated, is expected to continue as it is a global trend.
The Insurance Industry in Botswana
2020
Full Report
R 1 900.00(ZAR) estimated $108.03 (USD)*
Industry Landscape
R 1 330.00(ZAR) estimated $ 75.62 (USD)*
Table of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | COUNTRY INFORMATION | 1 |
| 3. | DESCRIPTION OF THE INDUSTRY | 2 |
| 3.1. | Industry Value Chain | 5 |
| 3.2. | Geographic Position | 6 |
| 4. | SIZE OF THE INDUSTRY | 7 |
| 5. | STATE OF THE INDUSTRY | 11 |
| 5.1. | Local | 11 |
| 5.1.1. | Corporate Actions | 12 |
| 5.1.2. | Regulations | 12 |
| 5.1.3. | Enterprise Development and Social Economic Development | 15 |
| 5.2. | Continental | 15 |
| 5.3. | International | 19 |
| 6. | INFLUENCING FACTORS | 22 |
| 6.1. | Economic Environment | 22 |
| 6.2. | Financial Inclusion | 23 |
| 6.3. | HIV/AIDS | 25 |
| 6.4. | Information Technology | 25 |
| 6.5. | Labour | 26 |
| 6.6. | Cybercrime | 26 |
| 6.7. | Environmental, Social and Governance (ESG) | 27 |
| 6.8. | Climate Change and Extreme Weather | 27 |
| 7. | COMPETITION | 28 |
| 7.1. | Barriers to Entry | 29 |
| 8. | SWOT ANALYSIS | 29 |
| 9. | OUTLOOK | 30 |
| 10. | INDUSTRY ASSOCIATIONS | 31 |
| 11. | REFERENCES | 31 |
| 11.1. | Publications | 31 |
| 11.2. | Websites | 32 |
| APPENDIX 1 | 33 | |
| Classes of General Insurance | 33 | |
| APPENDIX 2 | 35 | |
| Classes of Long-term Insurance | 35 | |
| APPENDIX 2 | 36 | |
| Summary of Notable Players | 36 | |
| COMPANY PROFILES | 39 | |
| AFRICAN BANKING CORPORATION OF BOTSWANA LTD | 39 | |
| ALPHA DIRECT INSURANCE COMPANY (PTY) LTD | 43 | |
| B.I.C.B LTD | 45 | |
| BANK GABORONE LTD | 47 | |
| BARCLAYS INSURANCE SERVICES (PTY) LTD | 49 | |
| BOTSWANA INSURANCE COMPANY LTD | 51 | |
| BOTSWANA INSURANCE HOLDINGS LTD | 54 | |
| CONTINENTAL REINSURANCE COMPANY LTD | 57 | |
| EMERITUS REINSURANCE COMPANY (PTY) LTD | 59 | |
| FIRST NATIONAL INSURANCE AGENCY (PTY) LTD | 61 | |
| FMRE PROPERTY AND CASUALTY (PTY) LTD | 62 | |
| GETBUCKS LTD | 64 | |
| HOLLARD INSURANCE COMPANY OF BOTSWANA (PTY) LTD (THE) | 66 | |
| HOLLARD LIFE ASSURANCE COMPANY OF BOTSWANA (PTY) LTD | 68 | |
| LETSHEGO HOLDINGS LTD | 70 | |
| LIBERTY GENERAL BOTSWANA (PTY) LTD | 74 | |
| LIBERTY LIFE BOTSWANA (PTY) LTD | 76 | |
| METROPOLITAN LIFE OF BOTSWANA LTD | 78 | |
| OLD MUTUAL FINANCIAL SERVICES BOTSWANA (PTY) LTD | 80 | |
| PHOENIX OF BOTSWANA ASSURANCE COMPANY (PTY) LTD | 82 | |
| SESIRO INSURANCE COMPANY (PTY) LTD | 84 | |
| STANBIC BANK BOTSWANA LTD | 86 | |
| STANDARD CHARTERED BANK BOTSWANA LTD | 90 | |
| SUNSHINE INSURANCE COMPANY OF BOTSWANA (PTY) LTD | 94 | |
| WESTERN INSURANCE BOTSWANA (PTY) LTD | 96 | |
| WESTERN LIFE INSURANCE BOTSWANA (PTY) LTD | 98 |
