Whilst the BRICS nations have attracted the focus of global investors in recent years, Africa has been making strong and significant economic strides demonstrated by real GDP growth of approximately 5% a year since 2006. An evolving traditional commodities sector led by energy projects such as Ghana’s offshore Jubilee oil field and an influx of Chinese and Indian development investment thanks to a demand for hydrocarbons as well as a growing and consumerist middle class has maintained this growth.
The subsequent impact on the insurance market is considerable. Regional written premiums grew by 7.28% to $72.43bn in 2012 as global (re)insurers look to take advantage of opportunities such as untapped takaful potential in West Africa, the compulsory motor market in Nigeria, marine, construction and oil transportation coverage in Angola and Ghana, and microhealth and agricultural insurance across all of southern Africa.
Tim Yeates, Business Development Director at Axco commented: “The benefits of African growth to the insurance industry are clear. Written premiums in Africa are on the rise and although challenges remain, there is still significant potential in these frontier markets.
“As growth in the BRICS nations slows due to localised economic and structural imbalances, incomplete reforms and concerns over global conditions, investors will be looking to alternative markets. Axco highlights the importance of an economically emerging region which is often overlooked.”
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