Regarding the article Des assureurs dans le collimateur, published on 23/10/03, I am very disappointed with the way the author tried to portray small companies, as if they were responsible for all the evils of the Mauritian insurance industry. We know that there is only one company officially under investigation by the FSC.

It is obvious that a small Insurance company will have smaller overheads and management expenses than a big company and that is why small insurance companies can afford to charge lower premium rates.

Smaller insurance companies cater for individuals of low to middle income groups and SMEs who do not own brand new Mercedes worth in excess of Rs 8 M. They therefore do not need to charge huge premiums for their insurance pool.

The success or collapse of an insurance company does not necessarily have anything to do with the tariffs of that company. It has rather something to do with honesty, long-term planning and good, experienced and qualified management. It is also to be noted that it is not small companies who have slashed rates in the past two years but rather medium and big insurance companies.

There was a niche market in which small insurance companies had established themselves and for which the big insurance companies had no interest. However, not too long ago the big companies realised that the market segment mentioned above represents a great opportunity for them. They thus slashed their rates to be able to poach these customers away from the small insurers. The latter retaliated by cutting down their rates to retain their existing clients.

Now it does not take a brilliant Economics, Finance or Marketing graduate to justify the reaction of small insurers to revise their rates to a low. It only takes some pure common sense. There has always been heavy lobby against small insurance companies because those big companies who are already established on the local market consider the small companies as a great business threat. In fact, I can even go as far as saying that rivalry has replaced true and fair competition, and it is a pity.

L?Express-Economie also published an article relating to the insurance industry on Wednesday 22 October 2003, where the author states that there presently exists a situation of Oligopoly in the Mauritian Insurance sector. I would like to know whether the Government of Mauritius or the FSC would do something to remedy this situation bearing in mind that they are making a new insurance legislation.

DELBOY A young professionnal