Transcript AFRICAN REINSURANCE PULSE - African Insurance Organisation

Africa Reinsurance Pulse 2016
Andreas Bollmann
21st African Reinsurance Forum
Dakar, Senegal
3 October 2016
© Dr. Schanz, Alms & Company AG
1st Africa Reinsurance Pulse

1st Africa Reinsurance Pulse – An authoritative study on the state and
prospects of the US$ 8.3 billion African reinsurance markets

Africa Re as lead sponsor

Provides additional data and information on one of the most attractive
growth regions in the industry

Based on in-depth market analysis and interviews with 22 senior executives
of the key reinsurance and brokers operating in Africa
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Survey focuses on the markets’ SWOT, rates and profitability, lines and
markets, developments to deepen penetration and strengthen regulation
African Insurance
Organisation
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Strong business sentiment due to growth potential of African
re/insurance sector
 Overall strong business sentiment based on underlying fundamentals
 Dampened mood due to decline of commodity prices and slower
growth
 Outlook improved as oil price recovers and fundamentals remain
intact
Business sentiment – ranking on a scale from -5 to +5
Source: Africa Reinsurance Pulse 2016, Dr. Schanz, Alms & Company
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Insurance penetration is far below the world’s average*
Non-life insurance penetration (premiums in % of GDP) and GDP per Capita (US$), 2014
*World: NL penetration, 2015: 2.77%
Source: Insurance penetration: Swiss Re sigma explorer, GDP / capita: IMF World Economic Outlook
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21st African Reinsurance Forum, 3 October 2016
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Increasing penetration driven by new technologies and costefficient distribution channels
 New technologies to drive increasing penetration levels
 Microinsurance raising awareness among the poor
 Bancassurance a fast-growing distribution channel
Drivers of an increasing insurance penetration (number of mentions)
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Africa – A US$ 4.9 billion non-life reinsurance market
Estimated non-life reinsurance market size of selected
African markets 20131/2014 (US$ million)2
 8 markets ceding more than
US$ 100 million each
 Africa generates approx. 1% of
global non-life insurance
premiums but 3% of non-life
reinsurance premiums
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© Dr. Schanz, Alms & Company AG
Cession rates well above the global average
Estimated non-life reinsurance cession rates of selected
African markets 20131/2014 (US$ million)2
 Africa’s large commercial
risks in need for global
non-life reinsurance
capacity
8.4%, ⍉
global
24%, ⍉
Africa
 Higher cession rates
because of often weaker
capitalisation of primary
insurers and relatively
higher share of
proportional reinsurance
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
SWOT: Strong fundamentals and business development
potential, but still vulnerable to external forces
Strengths (number of mentions)
Weaknesses (number of mentions)
Opportunities (number of mentions)
Threats (number of mentions)
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Fastest growing reinsurance markets and lines of business
The fastest growing reinsurance markets
(number of mentions)
The fastest growing reinsurance lines of business
(number of mentions)
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Moderately negative outlook on profitability, but improving
Current overall reinsurance profitability
(compared to the average of the past 12 months)
Outlook on reinsurance profitability
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Deteriorating reinsurance prices impacting growth prospects
Outlook on reinsurance exposure growth
Outlook on reinsurance premium growth
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21st African Reinsurance Forum, 3 October 2016
© Dr. Schanz, Alms & Company AG
Dynamic regulatory developments influencing the nature of
the game
 Regionalism / protectionism discussed controversially
 RBC introduction expected to improve underwriting discipline
 ‘No premium, no cover’ expected to improve liquidity and balance
sheets of primary insurers
Most relevant regulatory trends (number of mentions)
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© Dr. Schanz, Alms & Company AG
About Dr. Schanz, Alms & Company AG
 Research, strategy and communications consultancy, founded in
2007, based in Zurich
 Partners with long-standing experience in senior functions of leading
reinsurers
 Providing authoritative research on global reinsurance markets
MENA Re/ Insurance
Barometer:
Since 2011
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Asia Reinsurance
Pulse:
Since 2013
21st African Reinsurance Forum, 3 October 2016
Africa Insurance
Barometer:
2016
Africa Insurance
Directory:
2015
© Dr. Schanz, Alms & Company AG