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African reinsurance
According to “Atlas Reinsurance Reports Africa” 2026, a study conducted by Atlas Conseil International, Africa has 51 reinsurers by 31 December 2024, with total premiums of 6.269 billion USD.
While the development of the African direct market remains limited in terms of insurance penetration rate and the modest size of the portfolios covered, some countries and regulators on the continent are calling for the establishment of new local reinsurance entities.
This legitimate need for financial sovereignty clashes with a basic principle of reinsurance, which is based on the pooling of homogeneous risk portfolios across the widest possible area. A reinsurer cannot limit its acceptance to a few legal transfers underwritten in a restricted area.
In order to grow and survive, any reinsurer is required to first and foremost have substantial share capital and equity. Good capitalization enables it to cushion major claims and play a major role with local insurers. Without significant financial resources, reinsurers remain vulnerable to shocks at times characterized by high claims. Sufficient capital also enables reinsurers to support the growth of their international portfolios, inspire confidence among insurers and brokers, and obtain a good financial rating.
The second condition for success is that a reinsurance company is only viable if it has solid internal structures and high-level human skills. The technical discipline required is based on good risk and claims management, along with the financial aspect, an area in which the reinsurer must excel to protect and grow the technical provisions set aside for the benefit of its partners.
In conclusion, the establishment of a reinsurance company in Africa can be useful for the emergence of a more autonomous and sustainable ecosystem. However, this company is required to comply with international norms and standards, namely a long-term vision, a solid regulatory framework, exemplary governance, and above all, the financial and human resources to enable it to face ruthless competition.
