The split of business in Africa between international and African reinsurers is expected to tilt toward the continent's players, says the Africa Reinsurance Pulse 2019.
While international capacity will remain stable, local and regional capacity is on the rise as African markets continue to launch national reinsurers.
In addition, while protectionist measures increase the cost of doing business, local reinsurers seek to compensate for their loss in profitability and therefore further strive for top-line growth.
Reinsurance exposure is expected to outgrow GDP growth. Values are up, due to unfavourable exchange rates developments for imports as well as claims inflation in health insurance.
Executives also assume that premiums will grow in line or ahead of GDP, which across Africa will rise by 3.5%. However, market participants also voiced their concern that insurance is still not innovative enough to capitalise on the opportunities posed by technology and in the modernisation of Africa’s societies and economies.
The domestication of reinsurance premiums or the rise in protectionism remains the main concern for Africa’s reinsurers.
Market players ponder strategies to adapt to the new market realities. Apart from contemplating the cost of setting up offices in certain jurisdictions, they vow to strengthen their access to further business by improving their services and product proposition and by gradually upgrading their financial security rating.
In addition – as a gateway to further markets and risks – they consider strategic partnerships, pools or mechanisms of premium exchanges with other local or international reinsurers.