South Africa’s competition watchdog said on Thursday (August 25) it had raided the country’s major insurers over suspicions of potential price collusion on their products.
Source: Reuters/Mike Hutchings
South Africa has the largest and most developed insurance market in Africa and is home to companies that account for more than two-thirds of the total premiums collected across the continent by insurers.
Search and seizure
The Competition Commission suspects that eight insurers – Discovery, Sanlam, Old Mutual, Momentum, Hollard Insurance Group, BrightRock Life Limited, FMI and Professional Provident Society Limited – “engaged in a conspiracy to fix prices and/or trading conditions”. .
The “search and seizure” operations were carried out at the companies on suspicion of colluding to pay for investment products or products such as chronic health cover, disability insurance, life insurance and funeral benefits, the report said.
The companies under investigation allegedly shared information about premium rates for risk-related products and fees for investment products, allowing them to adjust the prices of existing and new insurance products.
NOW HAPPENING: #CompComSA investigators are seizing documents and electronic data, which will be analyzed along with other information collected to determine whether these firms have breached the Competition Act. #insurance #dawn raids #price fixing
— CompComSA (@CompComSA) August 25, 2022
“We adhere to all Competition Act principles and are complying with the Commission’s request for data and information relating to their investigation and will continue to cooperate as much as possible with their investigation across the industry,” Discovery said in a statement. .
Sanlam Life said it was cooperating with the Commission’s investigators and would notify all of its “relevant stakeholders”.
“We are committed to acting responsibly, delivering on our business strategy and delivering great value to all our stakeholders,” Old Mutual said in a statement.
The other companies did not immediately respond to requests for comment.
South African insurers have endured a tough two years due to the pandemic as high mortality claims ate into their profits and forced many to withhold dividends. But their incomes gradually began to return to pre-pandemic levels.