Sub-Saharan Africa Insurance Market Update

Economies across sub-Saharan Africa are hugely varied and this translates into differing insurance market maturity levels within the region. South Africa is home to the most established insurance market in the region, and the country services numerous neighbouring territories from a reinsurance standpoint. Nigeria, Kenya, and Ghana also have strong and burgeoning insurance markets. In other countries, however, there are very more nascent frameworks and structures in place.

Where there are solid frameworks in place, the insurance sector is buoyant and growing, but the reliance on facultative and treaty reinsurance from outside of Africa is significant. This generates its own challenges.

For most parts of the world, 2020 was embroiled in trials and challenges relating to COVID-19; in contrast, parts of Africa were only affected mildly —East Africa, for example. Other countries and regions within sub-Saharan Africa saw significant reduction in economic activity —a lack of construction activity, lack of trade, reduced cargo, and reduced marine activity. In West Africa, the pandemic translated directly into lower premium volumes than in previous year.

While there may not have been significant impact of COVID-19 on the ground for all countries in sub-Saharan Africa, the pandemic was still a bellwether due to the region’s reliance on international markets for insurance solutions, particularly with complex lines.

In this review, we look at some of the key lines of insurance for the sub-Saharan Africa region and offer insight into the key risks impacting those markets, the current state of pricing, and possible future trends.