Market concentration in the African insurance industry

The African insurance market is undergoing a period of profound structural transformation, marked by an intensification of consolidation and merger activity.

The African insurance market

Despite significant regional disparities, the African insurance market has shown sustained growth in written premiums. Between 2004 and 2024, the market size nearly doubled, rising from 37.6 billion USD in 2004 to 73.6 billion USD 20 years later.

Life insurance remains the primary source of premiums, accounting for 69% and 64% of total premiums written between 2004 and 2024, respectively. Although this sector has reported sustained growth of 77.8% over the past 20 years, non-life insurance has performed even better, with a 135.9% increase in premiums over the same period.

The market remains dominated, however, by South Africa, which alone accounted for nearly 71% of the continent’s total premiums in 2024, compared to 82% in 2004.

Excluding South Africa, the low insurance penetration and density rates in most African countries reveal significant market growth potential.

African insurance market: key indicators: 2004-2024

In billions USD

Sources : Fanaf and Sigma

M&A in Africa: strong growth potential for the insurance industry

Driven by strong population growth and significant development potential, the African insurance market is undergoing a phase of restructuring against the backdrop of rising pan-African groups.

In this market dynamic, mergers and acquisitions (M&A) are picking up momentum and emerging as a strategic lever for expansion, offering primarily African groups rapid access to high-value-added markets.

Ultimately, M&A transactions enable these players to pursue several objectives, namely:

• increase their market share,
• improve their technical profitability,
• pool technology and distribution costs,
• gain access to new regional markets,
• strengthen their underwriting and reinsurance capabilities.

This approach is particularly evident in South Africa, Morocco, Kenya, Egypt, and the CIMA region.

Factors behind the development of M&A in Africa

Regulatory requirements

The African insurance market is evolving under the spell of regulatory reforms. Regulators, whether regional, such as the Inter-African Conference on Insurance Markets (CIMA), or national, such as the National Insurance Commission (NAICOM) in Nigeria, the NIC in Ghana, the IRA in Kenya, and ACAPS in Morocco, impose strict solvency requirements, particularly regarding the minimum capital and equity of insurance companies and other market participants.

This regulatory tightening is designed to strengthen insurers’ financial soundness, improve their ability to absorb economic shocks, better protect policyholders, and attract investors. To comply with the new solvency requirements, companies are increasingly turning to mergers and acquisitions on the continent.

For instance, in Nigeria, the NAICOM has significantly raised the minimum capital requirements for insurers and reinsurers operating in the country. Under the new insurance law, adopted by the government in early August 2025, the increase in minimum capital requirements amounts to 400% for life insurance companies, 400% for non-life insurance companies, and 250% for reinsurers.

Increase in minimum capital requirements for insurance companies in Africa

Figures in USD

⁽¹⁾ Date of enactment of the new regulation regarding the share capital increase

Sources: Atlas Magazine and insurance laws of the countries concerned

Small size and market fragmentation

Many African insurance markets are small in size, which encourages consolidation.

In West Africa, and particularly in the Sahel countries, the market remains highly fragmented, characterized by a multitude of small players. This situation encourages companies to pursue mergers and acquisitions with a view to achieving critical mass, increasing their market share, and strengthening their competitiveness.

Seeking economies of scale and improving profitability

Mergers and acquisitions enable insurance companies to achieve economies of scale, optimize their operating and distribution costs, particularly through the pooling of agency networks, claims management systems, and IT infrastructure.

This is the approach adopted in recent years by several pan-African groups such as Sanlam and Old Mutual, which have made acquisitions in various markets to centralize their infrastructure and improve their profitability.

Low insurance penetration

In an underdeveloped market where insurance penetration often does not exceed 3%, insurers have no choice but to rely on external growth as a driver of development. Since organic growth is very low, mergers and acquisitions remain the only solution for accelerating revenue growth.

In Kenya, acquisitions have enabled regional groups to rapidly expand their customer base, particularly in the agricultural and health insurance segments, thereby contributing to improved insurance coverage.

Rise of Pan-African groups

The rise of Pan-African groups, led by South African insurers, is significantly boosting M&A activity. Alongside local groups, these players are seeking to rapidly establish a presence in underdeveloped markets wielding growth potential.

Entry strategies often rely on acquisitions or the gradual acquisition of stakes in already established local companies, which allows for rapid access to distribution networks and market share.

This rationale of external expansion serves as a true catalyst for M&A activity on the continent, fostering the gradual consolidation of the sector and the emergence of groups with regional or continental reach.

The strategy adopted by Sanlam clearly substantiates the role of mergers and acquisitions as an accelerator. For example, in the recent past, the Moroccan group Saham significantly strengthened its presence in several countries, particularly those in the CIMA zone, before being acquired itself by the South African firm Sanlam.

To further expand its geographic coverage and diversify its portfolio, Sanlam continued to expand its network by entering into a partnership with the German insurer Allianz, ultimately resulting in the Sanlam/Allianz structure.

Risk diversification

Insurers tend to diversify their portfolios by operating in multiple countries, which allows them to limit their exposure to the risks specific to a single market. This strategy promotes the pooling of risks across different geographic and economic regions. It also helps stabilize results and strengthen the financial resilience of insurance groups.

For instance, pan-African groups such as Sanlam, NSIA, Sunu, and Old Mutual operate in multiple countries. By diversifying risks, they have managed to mitigate the impact of local events, such as natural disasters or economic shocks.

Competitive pressure

Competitive pressure in African markets is a key driver of merger and acquisition activity. The expansion of regional conglomerates is amplifying competition. In this context, companies are motivated to strengthen their market position with a view to maintaining or even increasing their market share.

This is particularly true in Morocco and Kenya, where the presence of regional groups has led to mergers among local players to remain competitive against better-capitalized companies.

Major groups engaged in M&A operations in Africa

Alongside Sanlam, other African groups are also resorting to mergers and acquisitions to accelerate their growth on the African continent. These players include:

► The SUNU Group, a key player in life insurance in French-speaking sub-Saharan Africa thanks to targeted acquisitions. These acquisitions have enabled it to rapidly expand its regional network and consolidate its position in the CIMA markets. Founded in 1998 by Pathé Dione (deceased in 2023), the SUNU Group operates in 17 countries across West and Central Africa, with revenues amounting to 390 million USD in 2024.

► The NSIA Group, which has carried out several strategic M&A transactions in the banking and financial sector to strengthen its regional presence and diversify its activities. The group operates in 15 countries and reported insurance turnover of 300 million USD in 2024.

► South Africa’s Old Mutual, a long-standing and highly active player, ranking among the leaders in life insurance and asset management on the continent. It operates in 11 countries, particularly in Southern and Eastern Africa, with insurance turnover amounting to 1.4 billion USD in 2024.

► The South African group Hollard, through its Hollard International (HINT) division, is one of the most dynamic players in the consolidation of the insurance market in sub-Saharan Africa during the 2024–2026 period. Founded in 1980, the group is pursuing an aggressive expansion strategy combining direct acquisitions and strategic partnerships to build an integrated pan-African group. The acquisition of Global Alliance Seguros from Absa in Mozambique (transaction finalized in May 2025) and of Absa Life in Botswana is one of its most recent transactions. Its insurance turnover stood at 1.28 billion USD in 2024.

► Wafa Assurance, a subsidiary of the Attijariwafa Bank group, is pursuing a pan-African expansion strategy combining the creation of subsidiaries with mergers and acquisitions (M&A). In 2019, the Moroccan group acquired majority stakes in the Cameroonian insurers Pro Assur SA (65%) and Pro Assur Vie (89.4%). Wafa Assurance also acquired 63.4% of the Egyptian company Delta Insurance. The Moroccan group posted 1.266 billion USD in premiums in 2024.

► Finally, Chedid Capital, a major player in insurance and reinsurance brokerage. The group’s most significant transaction in Africa is the acquisition of the Ascoma Group, the leading independent brokerage network in sub-Saharan Africa. This transaction enabled Chedid Capital to take control of a network of 23 brokerage subsidiaries spread across 21 African countries.