Sub-Saharan Market Outlook

by  Xolani Mbiza

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Africa’s specialty insurance market is entering a new phase. Political change, infrastructure investment, energy transition, resource development and geopolitical volatility are reshaping risk profiles across the continent. For specialist insurers, reinsurers and brokers, the opportunity lies not only in growing demand, but in the need for more technical, responsive and regionally informed risk transfer solutions.

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From my experience supporting facultative placements across Southern and Sub-Saharan Africa, I believe the market is moving toward a more sophisticated risk environment where successful participants will be those capable of combining underwriting discipline, regional insight and access to diversified capacity.

 

Across Southern Africa, investor-friendly policy reforms in countries such as Zambia, Botswana and Namibia are supporting increased investment in infrastructure, energy, mining and private-sector development. These investments are generating demand across engineering, construction, renewable energy, mining, oil and gas, marine, liability and associated facultative reinsurance classes.

 

At the same time, political and social instability remains an important consideration for risk carriers. Security challenges in Mozambique, periodic unrest in Eswatini and episodes of civil disturbance in South Africa continue to influence underwriting appetite and portfolio management. As a result, demand for protection against strikes, riots, civil commotion, terrorism and sabotage remains a key feature of the specialty market.

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The July 2021 riots in South Africa marked a defining moment for the Political Violence and Terrorism (PVT) market. Following years of abundant capacity and highly competitive pricing, the scale of insured losses prompted insurers and reinsurers to reassess accumulation management, pricing adequacy and risk selection across the region.

 

While capacity remains available for well-managed risks, underwriting has become increasingly selective. Greater emphasis is now placed on security standards, business continuity planning, exposure aggregation and risk quality. This evolving environment creates opportunities for brokers capable of structuring sophisticated programmes and delivering tailored solutions for complex risks.

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Beyond Africa, geopolitical tensions in the Middle East and ongoing uncertainty involving the United States, Israel and Iran continue to influence specialty insurance markets globally. Concerns around shipping routes, supply chain resilience, marine exposures and trade disruption are increasingly relevant to African businesses participating in international trade. [1]

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Why This Market Matters

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Africa is emerging as one of the most attractive long-term growth markets for specialty insurance. Low insurance penetration, sustained infrastructure investment, increasing climate-related exposures and growing demand for technical risk solutions are creating opportunities across engineering, energy, agriculture, marine, cyber and parametric insurance.

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Although Africa represents approximately 18% of the world's population, it contributes less than 1% of global insurance premiums. With the continent's insurance market estimated at between USD 93 billion and USD 99 billion, and forecasts indicating sustained expansion over the coming decade, the growth potential remains substantial. [2]

The opportunity is particularly compelling within specialty lines, where many markets continue to experience limited underwriting capacity, shortages of technical expertise and increasing demand for innovative risk-transfer mechanisms.

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Sector Growth Trends Across Southern Africa

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Infrastructure, Engineering and Energy

 

Infrastructure investment continues to accelerate as governments seek to address energy deficits, improve transport networks and support economic diversification. South Africa alone is projected to attract approximately USD 582 billion in infrastructure investment between 2025 and 2050, while Zambia, Botswana, Namibia and Lesotho continue to invest in power generation, logistics corridors, water infrastructure and mining-related developments. [3]

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Simultaneously, Africa's energy sector is undergoing a significant transition. Investment in renewable energy, transmission infrastructure, green hydrogen and clean technologies has increased materially, with private-sector clean-energy investment rising from approximately USD 17 billion in 2019 to nearly USD 40 billion in 2024. These developments are driving demand for construction, operational, liability and specialist engineering insurance solutions. [3]

 

Mining, Natural Resources and Oil & Gas

 

Mining remains a cornerstone of economic growth across Southern Africa. Zambia is pursuing ambitious plans to increase copper production toward 3 million tonnes annually by 2031, Botswana is expanding its focus beyond diamonds into critical minerals, and Namibia continues to attract investment in uranium, rare earth minerals and offshore oil and gas exploration.

 

Together with ongoing LNG developments in Mozambique, these projects are creating significant demand for upstream and downstream energy insurance, marine coverage, construction risks, liability protection and facultative reinsurance support.

 

Marine, Trade and Agriculture

 

Regional trade integration and growing commodity exports continue to strengthen demand for marine cargo, transit, trade credit and war-risk insurance solutions. South Africa's major ports continue to play a central role in regional containerized trade, while Namport processed 253,996 TEUs during the year ended 31 March 2025, representing growth of approximately 33% year-on-year. [1]

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Agriculture remains equally important but increasingly exposed to climate-related risks. More frequent droughts, floods and severe weather events are driving demand for agricultural insurance, weather-index products and parametric solutions capable of delivering rapid claims responses and enhanced resilience. [4]

 

Political Violence and Terrorism

 

Political Violence and Terrorism remain an attractive specialty class, albeit one characterised by greater underwriting discipline than in previous years. While major losses remain relatively infrequent, awareness among corporates, financiers and project sponsors continues to grow.

 

Many infrastructure, mining, logistics and energy projects now require dedicated political violence protection as part of financing arrangements and broader enterprise risk management frameworks. This trend is expected to continue as investors place greater emphasis on resilience and security within emerging markets. [5]

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The Road Ahead…

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Taken together, these developments point to a more sophisticated and technically demanding specialty insurance market. As investment flows into infrastructure, mining, renewable energy, trade and natural resources, demand for engineering, marine, energy, political violence, agriculture and facultative reinsurance solutions is expected to increase across Southern Africa.

 

For market participants, success will depend on the ability to combine technical underwriting expertise, local market understanding and access to both regional and international capacity. Africa's specialty insurance market remains underdeveloped relative to its economic potential, and that gap represents one of the most compelling opportunities for growth in the global insurance sector.

 

Businesses that can connect African risks with appropriate sources of capacity, develop class-specific expertise and provide responsive, technically sound solutions will be best positioned to capitalise on the continent's next phase of specialty insurance growth.

 

 

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References

1. UNCTAD. AfCFTA Could Boost Maritime Trade in Africa.

2. Atlas Magazine. African Insurance Market Outlook 2025.

3. Africa Finance Corporation. State of Africa Infrastructure Report 2025.

4. World Economic Forum. Parametric Insurance  Climate Risk in Africa.

5. OECD. Africa's Development Dynamics 2025.

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This article is intended for general market commentary purposes only and does not constitute financial, legal, underwriting or risk management advice. Readers should obtain appropriate professional advice before making decisions based on the matters discussed.