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The four largest European reinsurers have maintained a presence in Africa for some time. Yet for new players moving in, despite all the opportunities and potential for diversification, many challenges still exist. Intelligent Insurer investigates.
Large corporate risks dominate broker business managed through international programmes in Africa. In terms of importance, South Africa remains the most developed market by far, which explains why most global companies targeting Africa form their subsidiaries there.
In many ways, the appeal of the region is obvious. It has recorded stable economic growth of 5 percent a year since 2011 and per capita GDP of more than $1,000 in 23 countries.
Sunkara Rao, CEO and managing director of GIC Re South Africa Ltd, says that the economic growth is also filtering into insurance. Many African insurance markets are growing at a rate of more than 10 percent annually with a cession rate of more than 30 percent. What is more, many insurers are actively seeking reinsurance capacities. “And insurance penetration is very low, which can be leveraged, he says.
Sub-Saharan Africa, Intelligent Insurer, South Africa, GIC Re, CKRe, reinsurance, AM Best, diversification