Macroeconomic volatility and political transitions continue to reshape insurance demand and capital strategy across Africa, according to Kearney, a leading management consulting firm.
In its recently released report, titled “The State of African Insurance in 2025”, Kearney says that affordability pressures are triggering policy cancellations and deferred renewals across income segments.
Giving examples, the report says that in early 2025, South Africa reported approximately 8.2m risk policies lapsed over the previous year, indicating lapse rates remain elevated despite slight improvements from 2024. Concurrently in Nigeria, fuel subsidy removal has tripled petrol prices, while rural inflation has surged nearly 23%, with households spending up to 60% of their income on essentials.
Kearney said, “Affordability is no longer a pricing lever; it is a design constraint. To preserve scale and solvency, insurers should develop ultra-low-cost, modular offerings that maintain value under financial strain. This will require:
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Granular affordability segmentation and household analytics
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Actuarial models with dynamic repricing capacity
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Modular product architecture aligned to economic volatility.