Reinsurers in sub-Saharan Africa (SSA) have reported another year of robust underwriting results, maintaining rate adequacy amid moderating market conditions according to a new AM Best report.
In its Best’s Market Segment Report, "Sub-Saharan Africa’s Reinsurers Maintain Robust Performance Amid Moderating Market Conditions", AM Best states that it still believes that the SSA reinsurance segment has substantial potential for continued and profitable growth and is expected to benefit from the region's considerable untapped reserves of natural resources, solid long-term economic growth prospects and increasing insurance penetration.
However, this positive trajectory is being clouded by another spell of global geopolitical uncertainty, specifically the ongoing conflict in the Middle East. The extent to which reinsurers will feel this impact will vary depending on their geographical mix of business, with diversification being a key mitigating factor.
Ms Naz Botea, Senior Financial Analyst at AM Best and one of the report's authors, said, "Overall, AM Best-rated reinsurers in the region are expected to remain resilient amid this dynamic risk landscape, supported by good capital buffers that have grown in recent years through robust internal capital generation, as well as the growing geographical diversification of invested assets and revenue."