South Africa’s competition regulator said on Thursday, August 25, that it had raided the country’s leading insurers over suspected price-fixing of their products.
Source: Reuters/Mike Hutchings
South Africa has the largest and most advanced insurance market in Africa, home to companies that account for over two-thirds of the total premiums written by insurers on the continent.
search and seizure
The Competition Commission said it suspected eight insurers – Discovery, Sanlam, Old Mutual, Momentum, Hollard Insurance Group, BrightRock Life Limited, FMI and the Professional Provident Society Limited – “engaged in collusive practices to compete in prices and/or to determine trading conditions”. .
The “search and seizure” operations at the companies were carried out on suspicion that they colluded on fees for investment products or for products such as chronic disease coverage, disability coverage, life insurance and funeral services, it said.
The surveyed companies shared information on premium rates for risk-related products and fees for investment products, which enabled them to adjust the prices of their existing and new insurance products, it said.
HAPPENS NOW: #CompComSA Investigators will seize documents and electronic data, which will be analyzed along with other information collected to determine whether these companies have violated competition laws. #Insurance #dawnraids #Pricing
— CompComSA (@CompComSA) August 25, 2022
“We comply with all principles of competition law and are compliant with the Commission’s request for data and information related to its investigation and will continue to cooperate with its industry-wide investigation to the extent possible,” Discovery said in a statement.
Sanlam Life said it has been cooperating with the commission’s investigators and will communicate with all its “relevant stakeholders” as appropriate.
“We are committed to acting responsibly while executing our business strategy and delivering great value to all of our stakeholders,” Old Mutual said in a statement.
The other companies did not immediately respond to requests for comment.
South African insurers have had a difficult two years due to the pandemic, as high mortality claims weighed on profits and many were forced to withhold dividends. But their earnings are slowly returning to pre-pandemic levels.