Insurance markets across sub-Saharan Africa provide an opportunity for diversification and an avenue for growth, and so remain attractive to international reinsurers taking a longer-term view, according to the ratings agency AM Best.

In a new Best’s Market Segment Report, “Sub-Saharan Africa Remains a Long-Term Opportunity for Reinsurers,” AM Best notes that sub-Saharan African reinsurers rated by AM Best have experienced strong growth over the past decade, with a 10-year compound annual growth rate of gross written premiums (GWP) of more than 7% (calculated in US dollars).

Increases in GWP have been driven predominantly by the non-life insurance segment, with life business at a nascent stage in many countries.

Mr Tim Prince, director, analytics at AM Best, said: “Despite uncertain market conditions, the rating fundamentals of the majority of AM Best-rated African reinsurers have been stable. For all of these entities, risk-adjusted capitalisation remains at the strongest level, largely as a consequence of their often underutilised capital bases relative to their low underwriting risk exposures.”

However, the report also notes that limitations in the strength of sub-Saharan African reinsurers’ risk management are an ongoing concern across the region.