AM Best has said sub-Saharan African reinsurers maintained robust underwriting results in 2025, although local capacity remains insufficient to meet growing demand across major risks
Sub-Saharan African (SSA) reinsurers are expected to remain resilient despite moderating pricing conditions and renewed economic pressures, according to AM Best.
The rating agency said underwriting performance remained strong in 2025, supported by stricter risk selection and pricing action on loss-affected accounts, while capital buffers have strengthened in recent years.
However, capacity supplied by Africa-domiciled reinsurers remains insufficient to meet regional demand.
AM Best highlighted the sector had achieved a third consecutive year of double-digit return on equity, helped by favourable interest rates and continued underwriting discipline.
The report described the region’s reinsurers as having “reported another year of robust underwriting results in 2025”, despite market conditions moderating since 2024.
Economic conditions also improved during 2025, with growth recovering and inflation and currency pressures easing following tighter monetary policy, as illustrated in the first chart.
However, AM Best warned renewed geopolitical instability and higher energy costs were creating fresh inflationary and currency pressure.
Underwriting margins remain strong
The combined ratio for AM Best-rated SSA reinsurers stood at 91.2% in 2025, compared with 90.6% in 2024, according to the second chart.
The figure has improved substantially since peaking at 99.5% in 2019.
AM Best attributed the longer-term improvement to tighter risk selection, stronger pricing in loss-affected markets such as Kenya and firmer terms and conditions across many of Africa’s largest reinsurance markets.
Pricing has nevertheless stabilised since the first half of 2025.
During 2026 renewals, rates generally improved in Anglophone West Africa but remained flat across most East African lines.
AM Best expects reinsurers to continue prioritising rate adequacy, particularly for catastrophe-exposed business.
Profitability has also remained strong.
The next chart shows ROE rising to 14.2% in 2025, the highest level shown in the report’s 2016-2025 series, while the 10-year weighted average exceeded 10%.
Capital rises but retention falls
Despite increasing capital, AM Best highlighted a persistent regional capacity shortfall, particularly for large property and energy risks.
The next chart shows capital and surplus among rated SSA reinsurers doubling from $1.5bn in 2016 to $3bn in 2025, while retention declined from 87.5% to 78.6%.
AM Best said insurance needs have grown faster than locally available capacity as regional economies industrialise, leaving reinsurers increasingly reliant on retrocession and experienced global reinsurers for complex risks.
The report said the SSA reinsurance market still has “substantial potential for continued and profitable growth”, supported by natural resources, long-term economic expansion and rising insurance penetration.
The last chart provides a listing of SSA regional reinsurers and their capital and surplus.
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