African insurance markets are undergoing a wave of regulatory modernisation, according to Kearney, a leading management consulting firm.
In its recently released report, titled “The State of African Insurance in 2025”, Kearney notes that African governments and supervisory authorities are accelerating reforms to improve sector resilience, expand financial inclusion, and align with international standards such as the IAIS Core Principles and risk-based solvency frameworks. From capital adequacy updates to universal health mandates, the common thread is a desire to build trust, attract investment, and increase access.
Regulatory shifts with commercial upside
The report reads, “These reforms reflect broader policy ambitions: formalising economies, safeguarding underserved populations, and promoting private-sector involvement in development. However, while the reform agenda is advancing across much of the continent, implementation remains uneven, seeking scalable growth across multiple markets.
“Insurers must move beyond compliance, aligning strategies with evolving public mandates to deliver affordable, inclusive, and commercially viable offerings.”
The current wave of insurance reform is not uniform, but several common themes offer potential commercial upside.
Theme 1: Risk-based capital reforms unlock scale and trust
As of 2024, multiple African regulators, including in Nigeria, Kenya, and Tanzania, are phasing in risk-based capital (RBC) frameworks to replace flat minimum thresholds. These reforms are aligned with international standards such as Solvency II, increasing regulatory oversight of asset–liability mismatches and governance quality. In Nigeria, the 2024 Insurance Industry Reform Bill increased capital requirements by four times across all lines and has triggered a significant wave of industry exits, mergers, and mid-sized insurer consolidation, with at least six insurance companies notifying the regulators of formal merger plans as part of recapitulation efforts.
This shift marks a departure from blunt capital floors toward risk-sensitive solvency assessment. It rewards actuarial sophistication, robust enterprise risk management, and scale-backed governance.
Insurers with strong balance sheets and technical depth should consider moving swiftly to acquire distressed portfolios, attract institutional investors, and scale into newly vacated segments. To win, insurers should strengthen actuarial capacity, optimise reinsurance structures, and design capital-efficient products that thrive under RBC scrutiny.
Theme 2: Public health coverage mandates are redrawing the boundaries of private insurance
Governments are expanding public health coverage through hybrid systems. In Morocco, millions of informal workers have joined public schemes since 2021. In South Africa, the National Health Insurance Act (NHI) proposes a phased single-payer model. Yet, private insurers still account for most health spend, underscoring persistent demand for speed, quality, and optionality.
Private insurers should reposition from risk-bearers to service orchestrators. Modular bolt-ons, such as digital chronic care or employer-funded outpatient bundles, can fill public gaps. Early investment in product design, data integration, and claims automation will anchor insurers within emerging health ecosystems.
Theme 3: African Continental Free Trade Area (AfCFTA) and regional blocs signal future cross-border potential
By mid-2024, the East African Insurance Supervisors Association launched a road map for mutual licence recognition and solvency convergence. Kenya’s regulator is working with peers to align capital requirements. Regional blocs such as the West African Economic and Monetary Union (WAEMU) and East African Community (EAC) are laying the foundations for future cross-border scale.
Regulatory divergence is no longer a compliance burden—it is a structural barrier to capital efficiency, margin scalability, and product speed-to-market.
To read the full report, please click here.