Reinsurers in sub-Saharan Africa continue to face challenging economic conditions, with competitive pressures on insurance activity exacerbated by economic and political concerns, according to a new report by A.Mr. Best, the London-based rating agency.
The report, “Sub-Saharan Markets Attract Reinsurers Despite Difficult Economic Conditions,” indicates that much of the region has been hit by high inflation, currency devaluation and election disputes. Despite the difficult market conditions, the African reinsurance market has grown significantly over the last decade and has achieved respectable financial performance.
Insurance markets are developing in local currencies but are slowly advancing in dollars. South Africa remains the largest market on the continent with $ 48.7 billion in premiums issued in 2017, representing 72% of the continent’s volume. In local currencies, premiums rose 5.3% but only 0.1% in dollars in this world-ranked 19th market.
According to Swiss Re institute, the African continent has the lowest insurance penetration rate in the world at 3% compared with 14% in South Africa and, paradoxically, 0.25% in Nigeria, the continent’s largest economy.
According to the report, Ethiopia, which has averaged 10% growth over the past decade, will be the best economy in the region in 2018. The legal transfer of treaties, domestication and regulatory change policies are at the top of the agenda. advantage of regional insurers. “But growth opportunities are tempered by the non-application of regulatory policies and competition from larger global reinsurers,” the report continues.
Africa Ré is the only African reinsurance company to be in the top 40 of the AM Best agency.
