Kenya, Nigeria and Morocco are the fastest growing reinsurance markets in Africa driven by the size and diversity of their economies, a young and growing population and advanced regulatory regimes. They are also the most profitable markets, again, due to their diversity, expertise and strong regulation according to the latest report by Dr. Schanz, Alms & Company.
The report adds that Africa’s slowest growing reinsurance markets are; Angola, Libya and Tunisia which are characterized by their reliance on hydrocarbon exports and political instability. Similarly, markets with low profitability are those that are politically unstable, such as Libya and, to a lesser extent, Egypt, or most severely affected by excess capacity like South Africa.
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The top 5 life insurance markets of the region are South Africa (US$ 37.5 billion), with a dominating share of 86%, followed by Morocco (US$ 1.1 billion), Egypt (US$ 1.0 billion), Kenya (US$ 0.7 billion) and Namibia (US$ 0.6 billion).
Africa’s total insurance premium volume in 2015 amounted to US$ 64 billion. Thereof, and with a share of 72%, South Africa is by far the largest African insurance market.
In 2015, African non-life premiums stood at US$ 20.4 billion, representing about 1% of global non-life premiums. The five largest markets South Africa, Morocco, Algeria, Kenya and Egypt account for 68% of the total. In non-life insurance, South Africa’s market share, at 41%, is less dominant than in the life space.
African life insurance premiums totalled US$ 43.7 billion in 2015, more than twice the size of the non-life insurance market (US$ 20.4 billion) or about two thirds of the market’s total premium volume.
Engineering, Energy and Life are the fastest growing lines of insurance business, reflecting Africa’s demand for infrastructure development, its abundance of natural resources and the increasing wealth of its population.
Kenya Commentary
The report also notes that Kenya has been the fastest growing reinsurance market in recent years. At almost 3%, the country’s insurance penetration is among the highest in Africa with awareness for insurance products where financial services literacy is perceived to be the advanced in East Africa.