South Africa’s competition watchdog on Thursday (August 25) raided the country’s top insurers over suspicions of price gouging in their products.
Source: Reuters/Mike Hutchings
South Africa has the largest and most advanced insurance market in Africa and is home to companies that account for more than two-thirds of the total premiums collected by insurers on the continent.
Search and grab
The Competition Commission said it suspected eight insurers – Discovery, Sanlam, Old Mutual, Momentum, Hollard Insurance Group, BrightRock Life Limited, FMI and Professional Provident Society Limited – “engaged in collusion to fix prices and/or trading conditions”. .
He said the “search and seizure” operations at the companies were carried out for investment products or suspicious products such as chronic health cover, disability cover, life cover and funeral assistance benefits.
He said the companies under investigation were sharing information on premiums for risk-related products and fees for investment products, allowing them to make adjustments to the prices of their existing and new insurance products.
What is happening now: #CompComSA Investigators will take documents and electronic data, which will be analyzed along with other data collected to determine whether these companies have violated the competition law. #Insurance # failure # Pricing
— CompComSA (@CompComSA) August 25, 2022
“We comply with all competition law principles and will honor the Commission’s request for information and data related to their investigation and will continue to cooperate with their industry-wide investigation as much as possible,” Discovery said in a statement.
Sanlam Life said it was cooperating with the commission’s investigators and said it would contact all “relevant stakeholders as appropriate”.
“We are committed to operating responsibly in executing our business strategy and delivering greater value to all stakeholders,” Old Mutual said in a statement.
The other companies did not immediately respond to requests for comment.
South African insurers have spent two years reeling from the pandemic as high mortality figures have eaten into profits and forced many to cut premiums. But their incomes are slowly returning to pre-pandemic levels.