Africa’s reinsurance executives continue to be bullish about the prospects of their markets. This is the outcome of the second edition of the Africa Reinsurance Pulse, launched today at the 22st African Reinsurance Forum in Port Louis, Mauritius. In 2016, Africa’s GDP growth dropped to 1.8%, below the global average of 2.5%. Insurance premiums declined by 5.3% to US$ 61 billion. However, the contraction is mainly due to the depreciation of some key African currencies against the US dollar. For 2018, the senior reinsurance and brokerage executives interviewed expect results to improve markedly as the underlying market fundamentals remain largely unscathed from the current decline.
The Africa Reinsurance Pulse is annual research series, conducted by Dr. Schanz, Alms & Company. It provides an authoritative overview of the current state and future prospects of Africa’s reinsurance markets. This year’s edition has been facilitated with the support of Africa Re, the African Insurance Organisation (AIO), Tunis Re and the Qatar Financial Centre (QFC). The study is based on in depth interviews with 20 reinsurers and brokers operating in the region.
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Contrary to the development in US dollar terms, in original currencies, most African insurance markets continued to grow in 2016. Going forward, they are expected to benefit from the low insurance penetration, the recovery of commodity prices and the continent’s need for infrastructure. Africa’s young and growing population, its expanding middle class and technological innovations, which alter consumer habits, drive demand and create product opportunities as well as new avenues for distribution.
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