The latest Expertise Publication from the Swiss Re Institute reviews recent developments in the economy and insurance markets of sub-Saharan Africa (SSA) excluding South Africa. It assesses the challenges and opportunities that lie ahead. Though still positive, in real terms SSA insurance premium growth has slowed notably from 2014 and came to a halt in 2016, mainly because of the weaknesses in oil exporting countries. However, the outlook is still positive based on the expectation of a recovery of economic activity and a continuation of the trend of increasing middle class. Key growth areas in the insurance sector lie in agriculture, health/medical and life/funeral coverage. The report is available on request for distribution to Swiss Re clients in hard copy only.
Key messages include:
Aggregate economic growth in SSA has slowed since 2014 due to the commodity price downturn. Nevertheless, there has been strong growth in some non-resource economies.
Though still positive, in real terms SSA insurance premium growth has slowed notably from 2014 also, and came to a halt in 2016.
The slowdown reflects the weak economic environment in Nigeria and Angola, the region's largest oil producers and number two and three in terms of size of their insurance markets. Premium growth has been stronger in the other-resource-intensive and non-resource-intensive economies.
In USD terms, however, premium volumes have contracted in many SSA markets since 2014 due to exchange rate movements
In recent years, life premiums have been growing faster than non-life; medical insurance has outperformed all other business lines.
The SSA insurance market remains small, but the outlook is positive based on the expectation of a recovery of economic activity and a continuation of the trend of increasing middle class.
Wealth creation and insurance demand should be further boosted by the region’s very young population. As a whole, SSA stands to benefit from a demographic dividend.
In insurance, agriculture, health/medical and life/funeral coverage are the key growth areas.