The long-term insurance (LTI) subsector in Namibia maintained sound financial stability in 2025, with solvency, liquidity and capital adequacy metrics within their normal historical ranges, according to the April 2026 Financial Stability Report released by the Bank of Namibia and the Namibia Financial Institutions Suprevisory Authority (NAMFISA).
Gross premium income was recorded at N$14.4bn ($880m), reflecting a slight decrease of 0.1% compared with 2024. This marks a notable deceleration from the 26.8% growth recorded in 2024, with that year’s elevated base being partly attributable to the transfer of retirement fund assets under management from a conventional asset manager to a long-term insurance provider. Reinsurance ceded remained low at N$666.0m, translating to a cession ratio of 4.6% and confirming the significant proportion of investment-linked business within the portfolio, which carries limited underwriting risk.
Total assets expanded to N$97.1bn at the end of 2025, representing asset growth of 15.8%, an uplift from the 12.9 % growth recorded in 2024, reflecting ongoing premium growth, strong investment returns, and the continued accumulation of policyholder reserves as the subsector absorbs both new business and the compounding of existing long-term obligations.
The balance sheet is dominated by long-duration policyholder obligations, underscoring the liability-driven nature of the business model and the central importance of asset-liability matching to solvency management. Policyholder liabilities expanded by 17.5 % to N$79.8bn in 2025. Capital and reserves stood at N$13.2bn (13.6 % of total assets), providing the primary loss-absorbing buffer against which the Capital Adequacy Requirement is assessed.
The investment portfolio totalled N$88.9bn, approximately 91.6 % of total assets, consistent with the capitalintensive, investment-driven nature of long-term insurance. The domestic-versus-offshore allocation was broadly balanced at 49.2% domestic and 50.8% offshore, providing natural diversification against countryspecific shocks while preserving meaningful exposure to domestic capital markets.
Prudential indicators
The long-term insurance (LTI) subsector’s prudential indicator dashboard presents a broadly stable picture. Solvency, liquidity and capital adequacy metrics are within their normal historical ranges, while underwriting profitability and portfolio risk composition indicators sit outside their historical norms and merit supervisory attention as part of ongoing engagement, assessed in the context of a subsector that remains solvent, liquid and profitable in aggregate.
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Prudential indicators 2025 of LTI subsector
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Indicator
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Latest
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Median
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P25
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P75
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Trigger
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Solvency ratio
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119.9
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121.8
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120.9
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123.4
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Normal
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Combined ratio
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103.9
|
87
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77.9
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101.1
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Alert
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Cession ratio
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4.6
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3.8
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3.3
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4.6
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Normal
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Underwriting profit margin
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-108.5
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-15
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-53.6
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4.7
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Alert
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Return on assets
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3.5
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0.8
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0.4
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1.4
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Normal
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Investment yield
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15.8
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2.1
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1.2
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3.9
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Normal
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Liquid asset to technical liabilities
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59.2
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53.2
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47.8
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58
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Normal
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Current ratio
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762.2
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625.5
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572.1
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709.1
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Normal
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Liquidity mismatch ratio
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41.1
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37.6
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22.9
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41.8
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Normal
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Source: NAMFISA
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The report warned, “A key prudential consideration for the LTI subsector is the structural composition of earnings, in which investment income is the primary driver of aggregate profitability, and, when assessed on a full-cycle basis, underwriting results remain negative for risk-transfer classes. This feature is shared by long-term insurance subsectors across comparable jurisdictions and is not in itself indicative of distress, but its relevance to financial stability lies in the sensitivity of the earnings structure to prolonged adverse investment conditions.”
LTI is a subsector in the non-bank financial sector that also includes short-term insurance, retirement funds, medical aid funds, collective investment schemes, friendly societies, etc.