The African Insurance Organisation (AIO), a pan-African organisation representing the continent’s insurance industry, has published its Annual Report 2026, prepared by consulting firm Faber Consulting, with the findings pointing to continued economic expansion, significant differences in insurance market development between countries and comparatively strong results from regional reinsurers.
The report also identifies access to reliable, consistent data as a key factor in determining how effectively insurers can implement AI technologies.
According to the AIO’s report, African economies recorded estimated average real gross domestic product (GDP) growth of 4.4% in 2025, exceeding the global average of 3.4%. Economic expansion was spread across several countries, with 22 African economies recording growth above 5%. Africa also accounted for 12 of the world’s 20 fastest-growing economies during the year.
The report attributes part of the improvement in the economic outlook to monetary easing, which helped bring average inflation down from 21.8% in January 2025 to 13.7% by December.
However, the AIO notes that the outlook for 2026 has been affected by the war in the Middle East, which has contributed to higher prices for oil, gas, food and fertiliser. The African Development Bank Group (AfDB) forecasts economic growth of 4.2% for Africa in 2026, before an expected increase to 4.4% in 2027.
East Africa continued to record the continent’s strongest regional growth, with an estimated expansion of 6.6% in 2025. Ethiopia recorded growth of 9.8%, while Rwanda’s economy expanded by 7.5%, according to the figures included in the AIO report.
Despite this economic performance, insurance penetration remains limited across much of Africa. The AIO’s analysis shows that, among the markets assessed, South Africa was the only country to exceed the global insurance penetration average of 7.4%, with insurance spending equivalent to 11.5% of GDP. Namibia recorded a penetration rate of 7.4%.
The distribution of insurance premiums also varies considerably between countries. The AIO report highlights the concentration of life insurance business in South Africa, where premiums reached USD 43.8 billion. This was substantially higher than the corresponding figures for Morocco, at USD 3.1 billion, and Kenya, at USD 1.8 billion.
Non-life insurance premiums were distributed across a broader range of markets, although South Africa remained the largest contributor. It generated USD 13.3 billion in premiums, representing approximately 47% of the total across the 22 markets examined. Morocco recorded USD 3.6 billion, followed by Kenya with USD 1.8 billion, Egypt with USD 1.6 billion, Algeria with USD 1.3 billion and Nigeria with USD 1.0 billion. These were the only other markets included in the analysis to surpass USD 1 billion in non-life premiums.
Profitability remains another area of concern for the sector. According to the AIO, insurers operating in compulsory insurance classes often generate narrow underwriting margins or make little to no profit from underwriting activities. Investment income consequently accounts for a substantial proportion of earnings in some markets.
The report warns that this reliance on investment returns can increase insurers’ exposure to sovereign risk, as insurance companies across Africa commonly maintain sizeable portfolios of government bonds.
Reinsurance results provide a more positive element in the AIO’s assessment of the industry. Drawing on figures from AM Best, the report states that sub-Saharan African reinsurers recorded double-digit returns on equity in 2025, marking the third consecutive year of such performance. Their aggregate combined ratio was 91.2%.
Alongside its assessment of market performance, the AIO has devoted a section of its 2026 report to the use of artificial intelligence in insurance. The organisation identifies a range of potential applications but notes that implementation remains at different stages across the continent.
Although several insurers have tested AI through pilot schemes, the report finds that relatively few have integrated the technology fully into their day-to-day operations. Limited access to structured data, a shortage of appropriately skilled professionals and regulatory uncertainty continue to present obstacles.
The AIO also points to the potential advantages for insurers that are not constrained by older technology infrastructure. Such companies may be better positioned to adopt newer systems without the complexity associated with upgrading established platforms.
However, the report stresses that access to suitable data is fundamental to achieving reliable results. It identifies data quality and representativeness as more important than simply increasing the quantity of information available. AI models trained on incomplete, inconsistent or unrepresentative datasets may produce inaccurate assessments of risk and lead to systematic pricing errors.
The challenge is particularly relevant in markets where insurers continue to rely on paper-based records or information stored in legacy systems. The AIO identifies these limitations as barriers to developing the data resources required for more widespread AI use.
To support improvements in data availability and consistency, the AIO co-sponsors the African Insurance Data Repository (AIDR). The initiative aims to bring together insurance statistics from markets across the continent and establish more standardised information for industry analysis. According to the report, the repository could help provide the data infrastructure needed to support the adoption of AI in African insurance.
Jean Baptiste Ntukamazina, Secretary General of the African Insurance Organisation, commented: “Artificial intelligence makes this work more valuable. AI is only as good as the data it is based on. The African Insurance Data Repository will supply the curated, verified inputs that make analysis meaningful for Africa’s insurance sector. We hope it will provide the foundation that lets Africa’s insurers use AI and other tools to produce results that decision-makers can trust.”
The AIO report also highlights existing applications of technology in underwriting and risk assessment. Parametric insurance products have been introduced at scale in Kenya, Ethiopia and Nigeria, while satellite imagery, mobile money transaction patterns and telematics are being used to help assess exposure in markets where conventional insurance data is scarce.
The report cites Naked Insurance, a South African insurer operating with an AI-first business model, as an example of the technology’s application to insurance services. The company can reportedly provide a binding quote in under 90 seconds, illustrating how automated systems can accelerate parts of the quotation and underwriting process.
