Fidelidade wants to grow in Mozambique and is looking at South Africa
Fidelidade director André Cardoso said the Mozambican market is "clearly one of those" where the company believes "it makes sense to invest".
Fidelidade director André Cardoso said on Tuesday that the insurance group had invested 46.8 million euros in buying 70% of SIM to grow in Mozambique and was looking at other African countries, including South Africa.
"International expansion has been a priority initiative for Fidelidade" since its privatisation and the arrival of Fosun, the Chinese shareholder that now holds 80% of its capital, the official said.
In this context, the company has been "investing in its presence in Africa. Angola, Cape Verde and Mozambique are countries where we have been present for several years. As well as the presence we have developed in other geographical areas, such as Latin America," he added.
Thus, "I would say that our international ambition was born with very strong support from the Chinese shareholder, but also from Caixa Geral de Depósitos," André Cardoso stressed, emphasising that in Africa, the Mozambican market is "clearly one of those" where the company believes "it makes sense to invest".
Until now, Fidelidade’s operation in Mozambique had been "relatively small", having entered the market organically in 2014.
Therefore, "we felt that SIM [Seguradora Internacional Moçambique], Impar, as it were, was the ideal partner for us to gain a set of skills and capabilities that would enable us to establish a new competitive position in the Mozambican market and be better prepared to capture its growth potential".
The company has local roots, a distribution network, close relationships with customers and technical expertise which, combined with Fidelidade’s existing operation in Mozambique, will place the group "in a more competitive, particularly more advantageous position in the Mozambican market", he explained.
The manager therefore considered that, following Fidelidade’s integration into Fidelidade Impar (the company’s future name), it will be "one of the main players in the Mozambican insurance market, with a distinctive range of capabilities".
"By bringing the two companies together, we are talking about a workforce of 200 people, a distribution network of 200 bank branches and more than 100 insurance intermediaries. In other words, we are creating a structure we are pleased with," he stressed.
But Mozambique is not the only African market Fidelidade is considering, he admitted. "I see Africa as a parallel focus" to Latin America, he said.
"We have never stopped investing in Africa. Our operation in Cape Verde is strong. We have also had an operation in Angola since 2012. In Cape Verde, we are the leading insurer. In Angola, we are among the top three insurance companies in the market. If we excluded state-owned insurers, we would be one of the leading companies in the Angolan market," he said.
Fidelidade also retains "the ambition to grow" in international markets. First, in markets where it is already present and wants to find ways to improve its competitive position, as in Mozambique. Then by moving into markets that are attractive to Fidelidade.
"It is not just one or two. There is a wider group, and I must say they are in Latin America and Africa.
In this context, "I do not want to say that South Africa will be a next step, but I can say that we are following the market and it is one that genuinely deserves our attention (...), although we do not yet have any specific interest".
Regarding the strategy for SIM, in which Fidelidade recently bought a 70% stake and which will be renamed Fidelidade Impar, André Cardoso said the group saw the deal as "a growth operation", because "we really do see growth happening in Mozambique, and we see insurance penetration increasing in the market".
What Fidelidade therefore wants is "precisely to take advantage of the complementary strengths and skills of each company and be stronger in the market", he emphasised.
For example, in the product area, "Fidelidade Impar will start offering health insurance in the Mozambican market. It was something Fidelidade had, but Impar did not".
For the success of the project, André Cardoso has no doubt that Millenium Bim [the Mozambican bank belonging to the Millennium bcp group] "is a strategic partner", because Fidelidade Impar will sell its insurance products through the bank’s network of 200 branches.
Fidelidade acquired 70% of the insurance company, while Millennium Bim retains 22% in the first phase, "so it is a key shareholder partner in the development of the project".
As part of this transaction, André Cardoso explained that "a long-term insurance distribution agreement through Banco Millennium Bim was secured, which forms part of the purchase process".
There is also "an options mechanism enabling us, within two to three years, to assess the possibility of acquiring a further 12%. But for us the most important thing, regardless of whether Millennium Bim has 10%, 20% or 22%, is that it always remains a relevant partner," he assured.
SIM essentially operates two brands: Impar, which is very well known in the market, and Bim Seguros for the banking channel.
"We will continue operating those two brands, and we will retain the Fidelidade brand, which has a strong name even in Africa, and we will operate the various brands because this also gives us greater flexibility to segment and work through different channels," André Cardoso said.
Therefore, "the parent company is called SIM, but since it is merely a legal vehicle, the brand that is going to emerge, or has already emerged, is Fidelidade Impar. That is the brand of tomorrow," he concluded.
