From Legislation to Reality: enabling the growth of IDI in Mauritius

As an island nation experiencing increasing urbanisation with a growing population, Mauritius has seen a rise in demand for high-quality housing and infrastructure. In 2012 the country introduced the Building Control act introducing the IDI policy to the market. Since 2020 this has been mandatory for residential and public construction projects.

Inherent Defects insurance (IDI) offers long-term protection (typically lasting 10 years) against structural defects arising from hidden structural design or material flaws. For homeowners and investors alike, these guarantees are highly desirable. When purchasing a property, buyers need to be confident that they will be compensated should those structures fail to stand the test of time.

IDI in Mauritius is a new line of business, largely made up of many smaller, single-risk placements that don’t necessarily justify a resource-intensive facultative approach from insurers.

The challenge was helping IDI in Mauritius move from a legislative framework into a functioning insurance market and enabling insurers to develop a sustainable product.

Recognising the potential to support clients access these new opportunities and build wider societal resilience, we have been a key player in the evolution of the Mauritian IDI market.

Recognising the gap between the IDI obligations and market readiness, we stepped in to offer knowledge and support. Deploying our capacity, tools and risk knowledge helped insurers overcome challenges around product development, technical expertise, and access to facultative capacity for smaller, standalone risks.

We worked closely with regulators, insurers, brokers and industry associations, directly engaging key stakeholders on the ground to help drive discussions as to how IDI could be implemented.

Swiss Re has been in the market providing traditional reinsurance capacity to support early IDI risks. Further, we also helped facilitate connections with technical inspection services (TIS), working closely with key regional partners.

At the same time, our team also set about developing eFac IDI – part of Swiss Re's Digital Engineering platform – a tool that allows insurers fast, simple access to capacity so they can get quotes and place risks around the clock.

Launched in 2023, eFac IDI became a key tool, providing both insurers and brokers with the ability to leverage our reinsurance capacity on a risk-by-risk basis, regardless of size.

eFac IDI helps insurers achieve the transparency and control required to monitor an evolving portfolio, while retaining the speed and efficiency needed to manage smaller risks.

To ensure confidence in its adoption, we provided training and support to underwriters, helping them to understand and navigate the eFac IDI platform.

eFac IDI helped address a fundamental gap in the Mauritian insurance market, providing the building blocks upon which compulsory IDI could be implemented effectively. It allows insurers to access our expertise and capacity for individual risks, without the delays or overheads of manual facultative underwriting. 

Now into its second year of operation, regional reinsurance brokers and insurers are active users of the platform, providing access to IDI reinsurance across the market. 

The system strikes the balance between ease of use and contract certainty. We invested significant time and resources in the tool’s development to ensure it was feature-rich and intuitive, delivering a smooth user experience, while also comprising all the required checks and balances that would be expected for a more complex line like IDI.

"If underwriter approval is required, it is typically received by the next day, which significantly improves our turnaround time", continues SWAN Mauritius.

Additionally, the platform is very user-friendly, and we highly recommend its continued use.

We’re committed to partner with our clients for the long-term. By sharing our experience products in markets where regulation is being developed, can help to improve and scale the deployment of relevant solutions.  

Many countries including Colombia, Spain, and the Kingdom of Saudi Arabia have also legislated compulsory IDI coverage, and many more governments are looking at introducing the concept.

This is where eFac IDI can come in – offering key underwriting oversight while also streamlining placements for small-to-mid standalone risks.