The withdrawal of Niger, Mali and Burkina Faso from the Economic Community of West African States (ECOWAS) is the latest sign of political turmoil in the region, but the direct impact on (re)insurance markets will be limited in the short term, according to a new commentary from AM Best.
In a new Best’s Commentary, “(Re)Insurance Markets in West Africa: Navigating Uncertainty Amid Political Shifts,” AM Best notes that while the insurance markets in Niger, Mali and Burkina Faso remain relatively small, large commercial risks require reinsurance, which is predominantly provided through mandated cessions to national and regional carriers (and retroceded to international markets) and traditional reinsurance buying. These are expected to continue to play a critical role in risk-sharing, despite the three countries’ exit from ECOWAS.
The commentary also points out that Niger, Mali and Burkina Faso remain members of the Conférence Interafricaine des Marchés d’Assurances (CIMA), which manages insurance regulations across member countries in the region.
AM Best does not expect to see any departures from CIMA, but such a move could lead to some regulatory uncertainty for (re)insurers operating in these markets.
ECOWAS announced the withdrawal of Niger, Mali and Burkina Faso in January 2025. With their departure, there are now 12 countries in the bloc. ECOWAS was founded in 1975 as a West African political and economic union.