Construction World October 2016

TEAMING UP TO CONQUER COMPLEX RISK

Stylish shopping malls, modern office blocks and housing developments are all evidence of a dramatic change in the way people across sub-Saharan Africa live, work and think about their future. With a young and growing population, this transformation is predicted to accelerate over the next 10 to 15 years.

This transformation will fuel increased infrastructure investment that creates insurance opportunities as new

the businesses with a broader product range and significant risk-bearing capacity, as they will be able to underwrite up to an additional USD250-million sum. This enhanced customer value proposition will increase choice for insurance brokers, buyers and investors, and enable more specialty insur- ance business to be retained in Africa. Sam Boyd, head of corporate and niche at Mutual & Federal explains: “We are a strong competitor in South Africa and are excited that we will be able to market Old Mutual Specialty Insurance solutions under the Mutual & Federal brand. This will allow us to underwrite a broader

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developments are going to need insurance during the construction phase and once they are operational. Across the rest of sub-Saharan Africa, Old Mutual has a market-leading footprint with strong insurance businesses. However, like Mutual & Federal, increased risk bearing capacity and a broader underwriting appetite would help the company to expand its growth in these markets. Generally speaking, large and complex ‘specialty insurance’ is still mainly insured by international reinsurance firms or in global insurance markets such as London, with small local risk participation. Therefore, Old Mutual Emerging Markets (which includes Mutual & Federal) have intro- duced Old Mutual Specialty Insurance. This is to increase its relevance to corporates, public bodies, investment companies or consortia that have more complex risk-management require- ments. For example, major industrial firms, property investment companies, construction and energy projects or political risks that threaten trade or investments. Boldly capitalising on opportunity Demand for large ‘specialty’ insurance, is expected to grow beyond USD10-billion in premiums in the near future. This demand will be driven by risks such as commercial property, construction, energy, terrorism, kidnapping and ransom threats and political risk. Mutual & Federal is the second largest corporate insurer in South Africa, with clients including a number of the best-known and largest companies, as well as leading positions in emerging sectors such as renewable energy. For Old Mutual emerging markets to realise its ambition of building a financial services champion in Africa, it makes sense to plug this gap. This is fitting especially as the company will be funding many of the large projects through subsidiaries such as Nedbank, the fund manage- ment business and its own insurance funds. Old Mutual specialty insurance Old Mutual specialty insurance offers custom- ised insurance solutions for large and complex clients, as well as for risks in nine product areas: commercial property, energy, construction, political risk and trade credit; mining, kidnap and ransom, terrorism, cargo, transit and delay in start-up and general aviation. These solutions will be delivered through established Old Mutual insurance businesses in sub-Saharan Africa and under the existing brands, including Mutual & Federal, UAP Old Mutual and Old Mutual Nigeria. This will provide

Sam Boyd, head of corporate and niche at Mutual & Federal.

portfolio of clients and be able to increase our participation in important and growing segments including the wholesale African business being placed into the Johannesburg market.”

MEGA PROJECTS BOOST CONCRETE PRODUCTS SECTOR New mega housing projects announced by the government stand to boost the concrete products manufacturing industry, which has seen many cement suppliers drop their prices due to decreased demand and excess cement supply.

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The government’s launch of 101 ‘cata- lytic projects’ in terms of its Breaking New Ground housing policy are likely

Having celebrated its 40 th anniversary with the unveiling of a new range of products and technology at Totally Concrete 2016, PMSA boasts a comprehensive range of equipment that can be used to manufacture every one of these products used in housing developments. “The equipment supplied by PMSA comes with comprehensive training, commissioning and support. This means the customer has confidenceoffullback-up.Weare locally-based, but with countrywide support, and three branches in Johannesburg, Durban and Cape Town,” Ebeling highlights.

to reduce any imminent retrenchments from the concrete products sector, PMSA MDWalter Ebeling comments. Current housing projects underway are too small and dispersed to make a significant impact, whereas the latest tranche of 101 projects, of which 94 are ready for implemen- tation, range across all nine provinces, with a combined value of over R300-billion. They are expected to generate 20 000 additional jobs in the construction and ancillary industries.

“With a stagnant growth rate, these housing mega projects will generate much needed demand side stim- ulus in the local economy which, in turn, drives supply from the private sector and new investment into capital equipment,” Ebeling points out. Concrete is used in all aspects of a housing devel- opment project, from roof tiles to bricks, blocks, paving for roads, concrete pipe- work for stormwater and sewage, road kerbstones and drainage, foundations and concrete floor slabs.

PMSA celebrates its 40 th anniversary this year with new range products and technology.

CONSTRUCTION WORLD OCTOBER 2016