The evolution of global economy is such that, in order to survive, Mauritian companies need to be on the lookout for new opportunities, de Navacelle says. “The abundance of insurance companies in an already limited local market is a challenge for local agencies. They will be called to test their long term viability and credibility through the quality of  their services and their capacity to innovate,” he adds.

The first step in line with this innovative trend will most probably be found in mergers, MU director says. “The local market is practically saturated with insurance companies and local agencies catering for different types of services might indeed think of merging. The next  step to development will be investing in foreign countries and developing partnerships with international firms. It is vital that we create networks and benefit from the economic growth of some countries,” he says.

African countries
He points out that African countries represent an interesting potential for local insurances. “Tanzania, Mozambique, Botswana, Burkinafaso, Burundi have known quite steady and regular economic developments during the past years and are among the countries that might interest local insurers.”

However, he adds, a number of hurdles have first to be overcome to foster the appropriate environment for such expansion. The first challenge that de Navacelle identifies is the new insurance policy regulating insurance activity.

“A positive step towards the client protection is that the new regulations require insurance companies to observe some degree of financial prudence. However coupled with this measure, the regulations also impose an enormous amount of administrative procedures for authorisations and reporting, making administrative constraints even heavier to bear,” he says.

Jacques de Navacelle also says that a regulatory body specialized in dealing with road accidents is needed. Presently in cases of  'Constat à l'amiable', where there is disagreement between the two parties, they appear before the Motor Vehicle Arbitration Tribunal. However the verdicts of this tribunal don't have force of law, making many companies bypass these sentences.

Real tribunal
“The Mauritius Union and the Association of Mauritian  Insurers have asked for the setting up of a real tribunal with full executive powers. This should soon be achieved with the project of setting up a Road Tribunal, presently under study,” he says.

The new legislation also makes provision for the setting up of international insurance companies in Mauritius. However, de Navacelle says, local companies don't have such a possibility in foreign countries which he considers is not fair.

On the other hand, the new insurance regulation does provide advantages especially to the client. “The legislation stipulates that the insurance companies should have some degree of financial guarantee in terms of capital and solvency ratio. This positive measure will thus force companies to stay competitive while at the same time ensuring that they are still able to insure their clients,” he  adds.

Though the present global economic trends and the local financial situations of the country augur little prospect for development in the sector, de Navacelle stays positive.

“The local personal market remains quite limited and offers some expansion possibilities. For instance, only 4% of Mauritians insure their houses against floods, fire and thefts, compared to 60% in European countries. This represents an important potential for this market. If we succeed in bringing this number to 40% of the population, this will definitely allow companies to stay competitive and to innovate,” he adds.