Market consolidation

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With 14% of the capital raised, investment funds are at the forefront of a vast movement to reshape the global economy.

The hope of a post-Covid-19 recovery was unfortunately short-lived. A few days after Russia invaded Ukraine on 24 February 2022, the IMF announced that the sanctions resulting from the armed conflict would have a significant impact on the global economy. The business and insurance world is entering a new phase of uncertainty.

Although this is not the first time that a geopolitical crisis has led to international imbalances, for many analysts, the Ukraine-Russia conflict [2] is not just a casual phenomenon. Coming right after the health crisis that highlighted the fragility and dependence of certain powers, the conflict in Central Europe could mark the end of the globalization that has dominated the economic scene for the past three decades.

It is no longer time to conquer new markets or territories. Companies are more concerned with securing their investments than with expansion. In insurance business, many companies are limiting their international commitments, withdrawing into their immediate territories or environment. With the return of inflation, rising interest rates and high volatility in the financial markets, some investors are even reluctant to finalize pending transactions.

The race for competitive edge and the optimization of portfolios will result in M&A transactions targeted at limited territories and activities.

Sanlam's takeover of Allianz's African network fits perfectly into this logic. The South African giant is withdrawing from certain non-strategic European markets to focus on Africa, a continent it dominates head and shoulders.

Atlas Magazine N°192 June 2022 [1]