Africa’s insurance market to surpass $91bn —Expert

AS Africa’s insurance market races toward a projected value of $91 billion by 2025 ending, the continent’s evolving landscape is seeing a paradigm shift in the industry.

The lion’s share of this growth is attributed to non-life insurance products, which have been gaining significant traction across the continent due to the increasing demand for protection against risks related to infrastructure development, natural disasters, and the burgeoning middle class.

This was stated by Cherif Harouna, a seasoned African consultant with a deep understanding of African affairs with over 10 years of experience navigating complex negotiations across Africa.

He noted that the African insurance market, once considered a niche sector with limited penetration, has grown to become a beacon of promise for insurers and reinsurers alike.

“With a total premium volume of $68 billion in 2020, the market is set to witness an annual growth rate of 7% over the next few years, leading to the projected $91 billion by the end of 2025,” Harouna highlighted.

He said, historically, the insurance industry in Africa has faced several challenges, including a lack of awareness, limited product offerings, and inadequate regulation, but a wave of transformation has begun.

This shift, he stated, can be traced back to the early 2000s when countries began to recognise the potential of the insurance sector in driving economic stability.

He pointed out that “South Africa, the largest insurance market on the continent, paved the way for growth with well-established insurance players, cutting-edge technology integration and regulatory reforms.

“This opened doors for other markets like Nigeria, Kenya, Egypt, and Ghana to adopt similar strategies, spurring the rise of non-life insurance products as a major revenue stream”.

Harouna identified several factors driving the expansion of the African insurance market, particularly non-life products as urbanisation and infrastructure growth, noting that as Africa continues its rapid urbanisation, there is an increasing demand for insurance to cover properties, vehicles, and infrastructure projects.

He said the rise of mobile insurance platforms is making it easier for individuals to access non-life insurance products, adding that Insurtech innovations have helped overcome barriers to access, especially in remote areas.

According to him, more governments are strengthening regulatory frameworks to promote a robust insurance ecosystem, and this regulatory clarity is attracting both local and foreign investors.

Delving into rising risk awareness, he observed that with the growing frequency of natural disasters and accidents, Africans are becoming more aware of the need for insurance protection, particularly for non-life risks.

Harouna stated, “The African insurance market is no longer a peripheral industry—it is a core player in the economic landscape. By 2025, the market’s projected value of $91 billion will be a testament to the strides made in non-life insurance offerings and the sector’s crucial role in mitigating risks across various industries.

“The success stories from countries like South Africa, Kenya, and Nigeria highlight the potential for growth and innovation within the sector, making it an exciting space for insurers, reinsurers, and investors alike. As Africa continues to evolve, non-life insurance will undoubtedly remain a pillar of economic stability and growth”.

Joseph Inokotong