LONDON--(BUSINESS WIRE)--Africa’s insurance and reinsurance markets continue to attract close scrutiny and rising interest from financial market participants in both the mature markets of the United States and Europe, as well as newer entrants from emerging BRIC (Brazil, Russia, India and China) countries. In addition, robust regional cross-border activity with Africa-based insurance groups buying other regional insurance companies has created a vibrant landscape, according to a new report from A.M. Best.
A.M. Best’s report titled, “Africa’s Insurance Markets: Gearing Up for Sustained Growth”, states that a number of the 54 African economies are growing by 5% to 10% and more, much faster than the mature markets, with drivers such as energy, construction and mining projects. This has made them attractive to insurance groups in the United States and Europe, where growth has been more limited.
Despite strong average GDP growth for the continent overall, many insurance markets in Africa are small by international standards. Deniese Imoukhuede, associate director, analytics, said: “Insurance penetration, while growing, is low at less than 1% overall, and insurers have faced challenges that include political risks, greater competition and increases in minimum capital levels. However, from June 2011 to June 2012, 28 out of 46 governments in sub-Saharan Africa implemented at least one regulatory reform, making it easier to do business.”
Africa’s insurers and reinsurers are poised to benefit from strong economic activity on the continent. Dr Edem Kuenyehia, associate director, market development and communications, added: “There are significant opportunities for direct insurers and reinsurers in key markets in Africa, particularly in fast-developing sub-Saharan markets such as Kenya, Nigeria and Ghana. However, companies need to stay focused on the economic and regulatory environment, given the diversity of markets on the continent.”
To access a complimentary copy of this report, please visit www.ambest.com/press/032401africamarketreview.pdf .
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