Supervision of the insurance market in Angola is weak with poor compliance with regulations by local players, says Fitch Ratings in a recent report.
The insurance sector is regulated under a Solvency I-type framework by the Angolan Insurance Regulation and Supervision Agency (ARSEG), an independent organisation founded in 2013.
ARSEG, under the supervision of the Angolan Ministry of Finance, is responsible for regulating and supervising insurance, reinsurance, pension funds and their management, and insurance mediation activities.
ARSEG’s mission is to ensure the proper functioning of the market; however, compliance by local market participants is weak.
Fitch believes technical sophistication in the Angolan insurance sector is also weak. The insurance sector is a fairly small part of the Angolan financial sector, with a low penetration rate, even by emerging market standards – the volume of written premiums to GDP was 0.6% in 2019. This was driven by fairly low household disposable income and an unfavourable business environment constraining growth in the market.
The life insurance sector in Angola is still in the very early stages of development, as life premiums accounted for around 2% of total premiums in 2019. The non-life sector is moderately diversified, dominated by health (42% of non-life premiums in 2019), followed by motor (13%) and workmen’s compensation (12%).