African Reinsurance Corp. Ratings Raised To ‘A’ On Consistent Strong Performance; Outlook Stable

S&P Global Ratings today raised its long-term issuer credit and insurer financial strength ratings on African Reinsurance Corp. (Africa Re) and its insurer financial strength rating on the subsidiary African Reinsurance Corp. (South Africa) Ltd., (which benefits from an unconditional guarantee) to ‘A’ from ‘A-‘. The outlook is stable.

The upgrade is a reflection of Africa’s Re’s strong operating performance, which is anchored by stable underwriting margins and resilient investment income. The company’s track record indicates disciplined pricing, prudent risk selection, and effective retrocession management across a diversified book of business. Africa Re reported robust underwriting profit for the first nine months of 2025, with a combined (loss and expense) ratio of about 84% under International Financial Reporting Standards (IFRS) 17, and net income of $130 million. We forecast that Africa Re will report profit averaging $130 million-$150 million over the next three years, supported by strong underwriting results and investment income. Although foreign exchange effects may introduce some volatility, given the mix of local currency premiums and U.S. dollar reporting, the reinsurer has historically absorbed these pressures without materially weakening its bottom line. This is a demonstration of good earnings resilience.

We expect Africa Re to maintain capital adequacy above the 99.99% confidence interval as measured by our risk-based capital model, supported by solid retained earnings. Africa Re’s sizable absolute capital above US$1 billion provides a substantial cushion relative to the company’s risk exposures. Moreover, as a result of marked geographic and line-of-business diversification, Africa Re gets significant diversification benefits that reduce its capital requirements under our model. The reinsurer’s conservative risk selection, prudent retrocession program and robust internal capital generation support a stable and resilient capital position. We expect Africa Re to maintain the same level of capital adequacy.

Africa Re benefits from a strong and well-established franchise across the African continent, which underpins its market-leading position. Because the reinsurer is a supranational institution, it is not under the control of any specific insurance regulator or regulated under a specific regulatory framework. Its role, as a supranational entity, is to promote and support the growth of African insurance and reinsurance markets. As such, it benefits from compulsory cessions in most African countries. This allows it to underwrite business in markets that may be inaccessible to smaller or less-established reinsurers, providing both scale and resilience. Over time, Africa Re has built deep relationships with national and regional insurers, allowing it to write business over and above the 5% treaty compulsory cessions, which accounted for only 7% of gross premium income in 2024.

The stable outlook reflects our expectation that Africa Re will retain its competitive position across its key markets and maintain its strong underwriting performance with an average combined ratio around 90%, while maintaining capital adequacy in line with the extreme stress level (99.99%) of our risk-based capital model.