Africa Reinsurance Pulse 2016 Andreas Bollmann 21st African Reinsurance Forum Dakar, Senegal 3 October 2016

1st Africa Reinsurance Pulse 1st Africa Reinsurance Pulse – An authoritative study on the state and prospects of the US$ 8.3 billion African reinsurance markets Africa Re as lead sponsor Provides additional data and information on one of the most attractive growth regions in the industry Based on in-depth market analysis and interviews with 22 senior executives of the key reinsurance and brokers operating in Africa Survey focuses on the markets’ SWOT, rates and profitability, lines and markets, developments to deepen penetration and strengthen regulation African Insurance Organisation

Strong business sentiment due to growth potential of African re/insurance sector Overall strong business sentiment based on underlying fundamentals Dampened mood due to decline of commodity prices and slower growth Outlook improved as oil price recovers and fundamentals remain intact Business sentiment – ranking on a scale from -5 to +5 Source: Africa Reinsurance Pulse 2016, Dr. Schanz, Alms & Company

Insurance penetration is far below the world’s average* Non-life insurance penetration (premiums in % of GDP) and GDP per Capita (US$), 2014 *World: NL penetration, 2015: 2.77% Source: Insurance penetration: Swiss Re sigma explorer, GDP / capita: IMF World Economic Outlook

Increasing penetration driven by new technologies and cost-efficient distribution channels New technologies to drive increasing penetration levels Microinsurance raising awareness among the poor Bancassurance a fast-growing distribution channel Drivers of an increasing insurance penetration (number of mentions)

Africa – A US$ 4.9 billion non-life reinsurance market Estimated non-life reinsurance market size of selected African markets 20131/2014 (US$ million)2 8 markets ceding more than US$ 100 million each Africa generates approx. 1% of global non-life insurance premiums but 3% of non-life reinsurance premiums

Cession rates well above the global average Estimated non-life reinsurance cession rates of selected African markets 20131/2014 (US$ million)2 8.4%, ⍉ global Africa’s large commercial risks in need for global non-life reinsurance capacity Higher cession rates because of often weaker capitalisation of primary insurers and relatively higher share of proportional reinsurance 24%, ⍉ Africa

SWOT: Strong fundamentals and business development potential, but still vulnerable to external forces Strengths (number of mentions) Weaknesses (number of mentions) Opportunities (number of mentions) Threats (number of mentions)

Fastest growing reinsurance markets and lines of business The fastest growing reinsurance markets (number of mentions) The fastest growing reinsurance lines of business (number of mentions)

Moderately negative outlook on profitability, but improving Current overall reinsurance profitability (compared to the average of the past 12 months) Outlook on reinsurance profitability

Deteriorating reinsurance prices impacting growth prospects Outlook on reinsurance exposure growth Outlook on reinsurance premium growth

Dynamic regulatory developments influencing the nature of the game Regionalism / protectionism discussed controversially RBC introduction expected to improve underwriting discipline ‘No premium, no cover’ expected to improve liquidity and balance sheets of primary insurers Most relevant regulatory trends (number of mentions)

About Dr. Schanz, Alms & Company AG Research, strategy and communications consultancy, founded in 2007, based in Zurich Partners with long-standing experience in senior functions of leading reinsurers Providing authoritative research on global reinsurance markets MENA Re/ Insurance Barometer: Since 2011 Asia Reinsurance Pulse: Since 2013 Africa Insurance Barometer: 2016 Africa Insurance Directory: 2015