(Ecofin Agency) - Even with its large population, the continent is still a small player in the insurance sector. It accounts for less than 1% of global premiums and has an average premium of just $46 per person.

South Africa, Morocco, Egypt, and Kenya collectively accounted for 84.8% of the total insurance premiums issued in Africa in 2023. This highlights significant disparities in market size and growth rates across the continent, according to the annual report from the African Insurance Organization (AIO) published on October 22, 2024.

South Africa led with $43.3 billion in premiums, which is 68.2% of the total issued across Africa last year. Morocco followed as the second-largest market, contributing 8.7% of premiums, while Egypt held 4%, and Kenya accounted for 3.9%.

Other notable markets included Nigeria (2.1%), Algeria (1.9%), Tunisia (1.8%), Namibia (1.5%), and Côte d'Ivoire (1.2%). Together, these nine countries made up 93.3% of the insurance premiums issued in 2023, leaving just 6.7% for the remaining 45 countries on the continent.

When adjusted for inflation, the total insurance premiums in Africa fell to $63.5 billion in 2023, down from $67.3 billion in 2022, marking a 5.6% decline from the previous year. Without adjusting for inflation, premiums showed a slight increase of 0.3%. Africa's share of the global insurance market remained limited at 0.9%, with an insurance penetration rate (premiums as a percentage of GDP) of 3.5% and an average premium per capita of $46.

The report also noted that the total life insurance premiums in Africa, when adjusted for inflation, amounted to $42.9 billion in 2023. This figure represented 1.5% of global life insurance premiums and saw no growth compared to 2022. In contrast, global life insurance premiums increased by 1.3%, while emerging markets experienced a growth of 7.8%. The average life insurance premium per capita in Africa was $31, with a penetration rate of 2.4%, slightly lower than the global average of 2.9% but higher than the 1.7% recorded across other emerging markets.

Looking ahead, the AIO anticipates an increase in demand for life insurance products in Africa due to improved economic growth prospects, rising incomes, and a larger middle class. South Africa continued to dominate the life insurance market with $34.8 billion in premiums, far surpassing Morocco ($2.5 billion), Egypt ($1.2 billion), and Kenya ($1.1 billion).

On the other hand, the non-life insurance sector, also referred to as property and casualty insurance, faced challenges in 2023. Inflation-adjusted non-life premiums fell to $20.59 billion, reflecting a 3.2% decline from 2022 and representing just 0.5% of global non-life insurance premiums. The penetration rate for non-life insurance in Africa was 1.1%, with an average per capita premium of only $15.15. South Africa again led this sector with $8.5 billion in non-life premiums, followed by Morocco ($2.9 billion), Kenya ($1.34 billion), and Egypt ($1.3 billion).

Despite the difficulties in the non-life sector, the AIO believes it will see growth in the coming years. This growth will be driven by improved economic conditions, the emergence of a middle class, rapid urbanization, and the swift development of infrastructure throughout the continent.