2024/25 Africa Insurance Outlook Report - SA's largest Insurers showing resilience

Africa’s insurance market has faced serious economic challenges over the past year. Amidst economic challenges such as high interest rates and inflation, South Africa's largest insurers, representing over 80% of the insurance market, have demonstrated resilience.

The introduction of IFRS 17 took a huge effort to implement and has impacted financial reporting and analysis of financial results – something that will be focused on more over the coming years.

In South Africa, the Prudential Authority is advocating for robust stress-testing frameworks tailored to liquidity risk. Insurers are now being expected to develop comprehensive governance structures, more relevant measurement techniques, and timely reporting mechanisms that bring liquidity risk management in line with regulatory global best practice.

Deloitte Africa has released the 2024/25 Africa Insurance Outlook, which offers a timely evaluation of the African insurance industry’s current activities, operating models, and the integration between actuarial, accounting, and technology to identify potential improvements.

Some key points to note in the report:

• The pace of digital change has been rapid and unrelenting. Whilst the financial services industry has been swift in reacting to the ongoing advancements in emerging digital technology, some sectors have reacted more quickly and effectively than others.

• The African insurance industry navigates a complex landscape marked by regulatory changes, technological advancements, and economic challenges. Embracing these changes and leveraging emerging opportunities can drive growth, enhance efficiency, and better serve customers. The future of insurance in Africa holds immense potential for those willing to innovate and adapt.

• As climate change and economic inequality become more pressing, the insurance industry is at a crossroads. Insurers are urged to move beyond traditional risk aversion towards creating stakeholder value. By aligning financial products with Sustainable Development Goals (SDGs) and fostering innovation for inclusion and resilience, industry can turn challenges into opportunities, driving sustainable development.

• Streamlining product ranges is essential for improving operational efficiency. South African insurers must address legacy products that inflate costs and hinder strategic growth. By rationalizing these products, insurers can achieve efficiency gains and enhance their competitive edge, ultimately positioning themselves as vital contributors to a sustainable and equitable future.

• The East African insurance sector is showing resilience and growth despite macroeconomic and geopolitical challenges, driven by a rising demand for risk transfer solutions. Recent shifts emphasize digital transformation and innovation, aligning with consumer expectations for accessible services.

To unpack the report findings, we have our subject matter experts available for a one-on-one discussion or interview. You can read or download the full report here.