AfrexInsure Bolsters Risk Mitigation in African Trade

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The Role of Specialty Insurance in Africa’s Trade and Industrialization

Africa's trade ambitions are built on a foundation that is often overlooked in the noise of global headlines. While much attention is given to ports, power, and tariffs, the real engine of growth lies in the systems that enable trade to flourish. At the heart of this system is specialty insurance—a form of coverage that is tailored to complex, high-value, and high-frequency commercial activities. This type of insurance is not just an option; it is essential for modern commerce.

Specialty insurance functions as the "plumbing" of trade. It helps identify, price, and transfer risks that could otherwise derail transactions, prevent revenue leakage, and underwrite investments that would otherwise be considered too risky. As African countries expand their intra-regional value chains, scale energy projects, and develop logistics corridors, the need for these specialized insurance programs has become more urgent than ever.

Examples of Specialty Insurance in Action

Marine cargo insurance serves as a critical safeguard for cross-border trade. It protects shippers, importers, and financiers from losses due to storms, theft, or other disruptions during transit. When exporters know their goods are insured, they are more likely to offer letters of credit, enter into larger contracts, and utilize trade finance more effectively.

Similarly, “Construction All Risks” (CAR) policies play a vital role in large-scale infrastructure projects. These policies cover material damage and liability during construction, reducing the risk of project delays and cost overruns. They also provide reassurance to lenders and support the growth of African engineering, procurement, and construction (EPC) firms backed by institutions like Afreximbank.

Business Interruption (BI) insurance ensures that businesses can continue operating after unexpected events such as fires or floods. This type of insurance allows companies to maintain payroll and service debt, which is crucial for long-term stability.

Energy projects, which require substantial capital and face technical and political challenges, are another area where specialty insurance is indispensable. Reliable and affordable power reduces production costs, enhances competitiveness, and supports long-term industrial growth.

The Shift Toward Local Insurance Solutions

Historically, much of Africa’s insurance premiums have been sent abroad, weakening domestic markets and making them vulnerable to foreign capital flight. However, Pan-African reinsurers such as Africa Re, Zep-Re, Continental Re, and WAICA Re are beginning to reverse this trend. By retaining premiums locally, these insurers help build capital pools that strengthen solvency and support investments in sovereign debt, infrastructure, and corporate projects.

This shift also fosters local expertise, enabling African insurers to develop sophisticated products rather than relying on offshore providers. Retaining premiums is not just about financial management—it is about building technical sovereignty and creating sustainable economic growth.

AfrexInsure: A Game-Changer in African Insurance

Afreximbank, Africa’s premier trade finance institution, launched Afrexim Insurance Management Company (AfrexInsure) in 2021 with a clear mission: to make specialty insurance accessible, retain premiums on the continent, and align insurance with Africa’s trade and industrialization agenda. Based in Mauritius, AfrexInsure was publicly launched in 2023 and has since become a key player in the region.

The company has formed a syndication of Pan-African (re)insurance players led by Africa Re, supported by Zep Re, Continental Re, WAICA Re, SanlamAllianz, Old Mutual, and Hollard. This model ensures that after in-country risk capacity is exhausted, the remaining risk is absorbed by the syndicate before being externalized.

So far, AfrexInsure has completed transactions in 24 countries, issuing over 205 policies across sectors including oil and gas, mining, construction, maritime, manufacturing, and financial services. It has insured assets worth over US$14.5 billion and generated more than US$29.7 million in premiums, with 94% retained in Africa through partnerships with regional carriers.

Building Credibility and Expanding Reach

AfrexInsure has established credibility with major clients such as Dangote, Oando, Arise IIP, Mota Engil, Telecel, and Essar Group. Its conversion rate on new business has improved significantly, from 10% in 2023 to 24% in 2024—well above the industry average. This success highlights the strength of its value proposition.

In addition, AfrexInsure has invested in strategic partnerships with insurers, regulators, and multilateral platforms such as the Alliance for African Multilateral Financial Institutions. These collaborations are essential for scaling operations and enhancing market reach.

The Road Ahead

AfrexInsure’s future involves transitioning into a full-fledged risk carrier, deepening integration with Afreximbank’s transaction flows, and expanding its pan-African syndicate of reinsurers. The company also plans to invest in new product lines and solutions for captive structures for multinational organizations.

Sustained investment in technical capacity, regulatory dialogues, and digital platforms will ensure resilience and scalability. More importantly, AfrexInsure’s success underscores a broader continental agenda: if African governments and regulators want trade-led growth, they must prioritize four key actions.

These include harmonizing solvency and reinsurance frameworks across borders, incentivizing premium retention through tax or regulatory credit, deepening local capital markets, and investing in technical partnerships to develop innovative products.

Conclusion

Infrastructure is built with steel and concrete, but it is secured with contracts, guarantees, and predictable cash flows. Specialty insurance transforms potential losses into priced risks, enabling lenders to extend credit, contractors to bid bigger, and exporters to trade at scale.

When ships are insured, ports are built, factories keep running, and power projects attract patient capital, trade grows. Africa’s growing mastery of risk transfer economics will ensure it does not just participate in global value chains—it will compete on value, resilience, and scale. With strong Pan-African reinsurers backing it, specialty insurance is the surest path to achieving this goal.