Sub-Saharan Africa offers long-term opportunities for reinsurers: AM Best

Sub-Saharan African markets remain attractive to international reinsurers taking a long-term view, according to the ratings agency AM Best.

The agency said that primary insurance markets across sub-Saharan Africa are mostly small by global standards, owing largely to different levels of economic development and low insurance penetration.

“However, they provide an opportunity for diversification and an avenue for growth and so remain attractive to international reinsurers taking a long-term view,” said AM Best.

The ongoing development and industrialisation of the continent’s economies, together with gradual increases in insurance penetration have contributed to the expansion of the region’s reinsurance markets over the longer term, trends that AM Best expects to continue.

Sub-Saharan African reinsurers rated by AM Best have experienced strong growth over the past decade, with a 10-year compound annual growth rate in gross written premiums (GWP) of more than 7 percent. The GWP growth has been driven predominantly by the non-life insurance segment, with life business at a nascent stage in many countries.

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