Sub-Saharan Africa’s insurance and reinsurance sectors stand at a defining moment. As the continent’s industrial growth accelerates, local reinsurers face mounting pressure to expand capacity, deepen expertise, and reduce dependence on foreign players. Despite improved profitability and regulatory reforms, the gap between economic expansion and local risk-retention capacity continues to widen.
According to the a recent AM Best Market Segment Report titled “Sub-Saharan Africa’s Reinsurers, Staying the Course Amid Economic Uncertainty” highlights this imbalance, revealing that regional reinsurers remain unable to fully meet the growing demand for complex risk coverage, particularly in energy, aviation, and infrastructure sectors.
“The industrialization of African economies has outpaced the region’s reinsurance capacity,” AM Best reported. “While local reinsurers have grown financially, their ability to retain risk has lagged behind market demand, forcing continued reliance on global partners.”
The findings have reignited conversations among Nigerian and African industry leaders about the future of reinsurance independence on the continent, and the role of institutions like Africa Re and Continental Reinsurance Plc in bridging that gap.
Nigeria’s Experts Call for Urgent Action
In Nigeria, industry leaders are rallying around the need for capitalization, regional synergy, and investor participation to build resilience and sustainability in the reinsurance space.
Mr. Segun Omosehin, Commissioner for Insurance and Chief Executive of the National Insurance Commission (NAICOM), said Nigeria’s Insurance Industry Reform Agenda (NIIRA 2025) is focused on positioning the country as a reinsurance hub for West Africa through sound regulation and innovation.
“We must deliberately strengthen local reinsurers and encourage cross-border partnerships,” Omosehin stated. “NIIRA 2025 is designed to grow our capital base and help African insurers retain more risks within the continent.”
A Lagos-based insurance economist, added that Africa’s reinsurers must embrace technology-driven solutions, data analytics, and alternative risk transfer mechanisms to remain competitive.
“We can no longer depend on European reinsurers for every large industrial project,” Ladipo warned. “Africa must innovate, pool capacity regionally, and invest in the technical tools that drive efficient underwriting.”
Investor Confidence Key to Reinsurance Growth
Economist and investor advocate Mr. Celestine Ukpong, based in Lagos, argues that Africa’s reinsurance sustainability depends on deepening investor confidence and aligning insurance capital with broader financial markets.
“Africa’s reinsurance sector cannot thrive without strong investor participation,” Ukpong said. “We need frameworks that attract institutional investors, pension funds, sovereign wealth funds, and private equity, into the reinsurance ecosystem. That’s how we scale capacity and reduce foreign dependence.”
Ukpong also commended Africa Re (African Reinsurance Corporation) for leading by example in strengthening local capacity and promoting risk retention across the continent.
Africa Re: Building Africa’s Reinsurance Backbone
Founded in 1976 by African states and the African Development Bank (AfDB), Africa Re remains the cornerstone of the continent’s reinsurance architecture. Its mission is simple yet vital, to help African insurers retain more risks locally and strengthen the continent’s financial independence.
Through its extensive presence in Nigeria, Kenya, Morocco, Egypt, and South Africa, Africa Re provides capacity, technical expertise, and risk solutions across over 40 African countries.
Key contributions include:
- Capacity Building: Regular training and technical workshops to enhance underwriting and claims management.
- Risk Retention: Reducing capital flight by retaining African risks within Africa.
- Product Innovation: Supporting new lines such as agriculture, energy, and microinsurance.
- Partnerships: Collaborating with regulators and governments to promote sound insurance frameworks.
Africa Re’s financial stability and strong credit ratings from AM Best and Standard & Poor’s also help reinforce global confidence in African risk markets.
“Africa Re shows that African-led institutions can meet global standards,” Ukpong emphasized. “The challenge is scaling that success across national reinsurers.”
Continental Reinsurance: A Pan-African Force
Alongside Africa Re, Continental Reinsurance Plc (CRe Nigeria) has emerged as one of the continent’s leading private reinsurers. Established in 1985 and headquartered in Lagos, the company provides reinsurance solutions in more than 50 African countries through subsidiaries and offices in Kenya, Tunisia, Botswana, Côte d’Ivoire, and Cameroon.
CRe’s operations span life and non-life reinsurance, including energy, property, marine, aviation, and agriculture lines. Its commitment to localized expertise and technical training has made it a cornerstone of Africa’s reinsurance advancement.
Major contributions include:
- Pan-African Reach: Providing regional support tailored to market needs.
- Training and Knowledge Transfer: Strengthening underwriting and claims expertise.
- Innovation: Promoting agriculture and climate-risk insurance across emerging markets.
- Integration: Aligning with AfCFTA to promote intra-African financial collaboration.
“Continental Re is bridging the gap between local capacity and global standards,” noted Mr. Ben Ogundipe, a Lagos-based risk analyst. “Its regional presence ensures that African insurers can access reliable reinsurance support close to home.”
Profitability Strong, But Protection Gap Persists
Despite strong underwriting profitability and double-digit returns on equity (ROE) over the past two years, AM Best notes that the region’s overall risk retention remains weak. Smaller firms struggle with high operational costs, limited scale, and regulatory inconsistency.
Meanwhile, natural disasters continue to test the market. Gallagher Re estimates that Africa suffered $9 billion in economic losses in 2024, far exceeding its 10-year average of $6 billion. Cyclones Chido and Freddy, along with the Morocco earthquake, underscored the urgent need for greater insurance penetration and catastrophe risk coverage.
Yet, with inflation easing to 4.5% in 2024 and GDP growth projected at 3.8% for 2025 by the IMF, experts believe Africa’s reinsurers have a strategic opportunity to strengthen capital, innovate, and collaborate for long-term sustainability.
The Path Forward: Unity, Innovation, and Investment
For Africa to reduce its dependence on global reinsurance, experts agree on three critical priorities:
- Deepen Capitalization: Attract institutional investors and strengthen financial governance.
- Promote Regional Collaboration: Build risk-sharing pools and alliances under AfCFTA.
- Invest in Technical Capacity: Expand training, data infrastructure, and innovation-driven underwriting.
“Africa’s reinsurance future lies in unity, innovation, and investment,” Ogundipe concluded. “If we can pool capital, share data, and build trust, we can retain more risks, protect our industries, and truly own our economic destiny.”
Africa’s industrial growth is outpacing reinsurance capacity, AM Best warns. Nigerian experts and economists like Celestine Ukpong urge stronger capitalization, while Africa Re and Continental Reinsurance lead efforts to deepen local capacity and regional collaboration across the continent.
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