New thinking in unlocking opportunity in Africa’s insurance markets
Conducting cross-border business in Africa presents a formidable challenge for insurance and reinsurance brokers, who must navigate four persistent hurdles: capacity constraints, fragmented regulation, hard currency shortages and a shortage of technical skills.
Broking obstacles and opportunities
A panel discussion on borderless broking, facilitated by Peter Olyott, CEO of Willis South Africa, was one of the highlights from the two-day-long African Insurance Conference (AIE 2025), held at Sun City recently. Olyott took to the stage with two of his intermediary peers to consider the obstacles and opportunities for local brokers keen to expand into Africa. As promised in our AIE 2025 overview, we now unpack this session in more detail.
Thulisa Majodina, Regional Controller for Africa at Aon Global Client Network, shared from her experience working at a firm with around 42 business partners across the continent. She said that insurance was a complex language, and that even experienced insurance practitioners sometimes lost detail in translation, especially when placing risks in multiple country markets. “As you go from country to country, you will find that the laws are different [and] there are variations in terms of capacity, deductible structures, limits and so forth,” she said.
Brokers looking to write cross-border business in Africa were encouraged to leverage their global partnerships, but in a localised manner. Majodina highlighted compulsory insurances; limitations in contractual terms; and in-country rules regarding the export of cover and premiums as potential stumbling blocks. “You first have to exhaust local capacity before you take risk outside the country,” she said. A detailed understanding of local regulations is non-negotiable too.
On the hunt for insurance capacity
The facilitator asked Cameron Cupido, CEO of Reinsurance Solutions South Africa, about the role of reinsurers in securing and/or increasing risk capacity in Africa. “Reinsurance is a source of capital that is required for us to be able to grow the insurance market on the continent … [we do] not have enough reinsurance capacity to cater for our needs,” he said. Africa’s reinsurance brokers face the tough job of convincing international reinsurers, who often have limited knowledge of investing in the continent, to deploy capital into Africa.
Insurance and reinsurance premiums are closely correlated with economic activity. Olyott asked whether the African Continental Free Trade Area (AfCFTA), established in 2021 and signed by 53 African countries to date, has had an impact on insurance business on the continent. Specifically, he asked the panellists how an insurance broker might advise a South African business seeking to expand its footprint into multiple African countries. “What do you think these firms should look for to ensure they are insured legally?” he asked.
The Aon representative took the first stab at this exercise. She suggested starting with the agreement and taking care that it was geared towards achieving capacity at the regional level. Her answer revealed somewhat of a catch-22 facing brokers and insurers across the region. “On the one hand, we are trying to open up borders, [on the other] the regulators are trying to protect the premium,” Majodina said. Although keeping premium in-country and on the continent is praiseworthy, it must be done smartly.
A professional approach to regulators, regulation
Insurance brokers advising a business operating out of South Africa into Botswana, Uganda, Zambia and others will also have to keep a close eye on local regulations in each country, including licensing, operating and shareholding requirements. “My advice to brokers is to understand the [country] regulations … [and to] work with the regulators,” she said, before offering a timely reminder that reinsurance broking is a global pursuit. In this context, local regulators often add layers of complexity and cost, which are ultimately carried by consumers.
Playing devil’s advocate, Olyott wondered whether businesses operating in Africa might circumvent local insurance regulations by going the digital route. “Digitalisation is happening faster than the regulators can keep up,” Cupido said, before offering a no-nonsense warning that there could be no skirting of regulations. He conceded, however, that regulators were having a hard time keeping up with the accelerated adoption of artificial intelligence (AI), machine learning and other technologies in underwriting.
Majodina countered that economic growth was needed to improve Africa’s poor insurance penetration rate. “As much as we want to improve the ease of doing business in each of these countries, and [achieve] harmony in terms of regulations and how we conduct business, it is important to make sure that premiums and risk are met in-country to the best of their ability,” she said. In her view, it is preferable to retain capacity in-country or regionally before looking to international markets.
Reinsuring offshore is part of mega deals
One of the major challenges facing cross-border African brokers is that international investors often insist on their exposures to mega infrastructure projects being insured in their home countries. “You have these multi-billion-rand projects going up and not even 10% [of the insurance] stays in the country,” Olyott said. “How do we change this narrative?” The panellists opined that the capacity constraints were probably easier to address than investor demands; how do you refuse a request to reinsure a risk in the country where the funding originates?
According to Majodina, tackling this issue requires interactions between the local and international broker, the investors, the underwriters and even government and regulators. A solution might involve agreement over the amount of capacity and premium being retained in-country and regionally before it goes overseas. A tougher approach would be for local stakeholders to set terms and stick to their guns, saying “Yes, we can place this risk on cover, and this is how we propose to do it.”
Developing technical skills across the broking and underwriting disciplines is critical to realising the vision of a truly borderless African insurance market. Cupido contended that while there is a strong desire to retain risk on the continent, the industry must first prove it can manage the complexity of such risks. “Skills is where we need to start,” he said. “We need to be able to demonstrate that we have the skill sets, and we are able to handle some of these very complex risks [in sectors like] oil and gas and cyber.” In the absence of competent, skilled professionals, high-value risks will continue to be placed offshore.
Africa faces a growing skills crisis
There is a lack of structured skills transfer across all insurance disciplines in Africa, and it remains difficult to attract new talent. Cupido called for greater investment in youth training, the identification and nurturing of talent from a young age, and repositioning insurance as a viable and exciting career choice. “We are constantly fighting over a handful of skills, and a lot of those skills are also going abroad,” he said. One solution could be to improve on foundational risk management knowledge, perhaps by offering insurance education at school level.
South Africa stands out as the continent’s most mature insurance and financial services market. Olyott suggested the country’s strong infrastructure and institutional knowledge could be instrumental in driving knowledge transfer and fostering cross-border partnerships on the continent. Majodina commented that the insurance sector would have to move from a product-driven mindset to a needs-based approach that translates solutions into tangible value for local communities, in addition to recognising cultural and social norms.
For example, funeral insurance is big in South Africa, but taboo in Nigeria. Microinsurance and parametric products were held up as examples of models that are gaining traction in Africa because they address real needs in contextually appropriate ways. But despite the many complexities of doing business across African borders, the insurance opportunity remains viable.
Partnering for success
Success depends on building strong partnerships between international and local brokers, where those on the ground provide crucial insights into operational nuances and regulation. This collaboration will enable firms to bridge gaps and deliver effective solutions. As Majodina noted, insurance stakeholders should engage on a reciprocal basis, “learning from each other, and making sure that we show up in the best way for the client, in the context that matters for them.”
Writer’s thoughts:
This thought-provoking panel on borderless broking in Africa surfaced possible solutions to some of the continent’s biggest general insurance constraints. Do you think a single African insurance market is achievable in our time? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
