When KPMG, the advisory company, held its inaugural East Africa Insurance Conference in February, organisers were surprised that more than 100 industry participants attended. James Norman, KPMG’s regional insurance head, was equally enthused when a similar number attended the launch of a report on the sector last week.

“There’s a real buzz about the sector because opportunities are immense,” he says. “There’s a young population, a growing middle class — most with smartphones — and an increasingly large diaspora coming back,” he says. “There’s a whole new generation of savvy consumers with disposable incomes and large infrastructure projects being built.”

Lukas Mueller, head of north and sub-Saharan Africa at reinsurer Swiss Re, is also bullish on the region, describing it as a “giant waking up”. He says the opportunities are many and varied — from infrastructure and agriculture to catering for the growing middle class.

“The insurance market is closely linked to economic growth,” he says. “When incomes rise you have more insurable assets.” However, he also describes the sub-Saharan African insurance market as a “diverse picture”.

South Africa accounts for almost 80 per cent of all premiums in sub-Saharan Africa and the country has an insurance penetration rate — the total value of insurance premiums as a proportion of GDP — of about 13 per cent, well above the developed world average. Of the rest, Kenya is among the most advanced, with a penetration rate of 3 per cent. Nigerias, in comparison, is about 0.3 per cent, even though it is Africa’s largest economy.

This diversity mirrors the continent’s broader economy. Commodity exporters, such as Nigeria and Angola, are struggling to achieve meaningful growth, while those nations with more diversified and less commodity-dependent economies — such as Ivory Coast, Tanzania and Kenya — are doing much better.
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