Work as an Axco consultant takes you far and wide, and 2024 was no different for me. Bookended by visits to two neighbouring African nations - Angola in January, and recently Zambia as a pre-Christmas trip.
A short drive from the airport under the broad, clear sky of the African savannah, and you’re in the Zambian capital, Lusaka. The capital is calm and welcoming: softly spoken, like its people. It’s tidy and clean to a degree that would shame many wealthier capitals. Subtle British influences still remain, driving on the left, suits and ties at work, and yes, they still call chips "chips" not "fries."
The Zambian insurance market is home to 19 insurers (arguably too many) and no fewer than six professional reinsurers. For a small market, it’s a surprising number of reinsurers – so what are they all doing?
Reinsurance, of course, is inherently international, and all the reinsurers write business abroad to one degree or another. However, only two - Zambia Re and Emeritus Re - focus primarily on supporting domestic insurers. The others have strategically chosen Zambia as their launch pad into broader markets:
Why Zambia?
“So, why Zambia?” was my question. There are plenty of countries to invest in,why set up in Lusaka?
There are many pieces to the jigsaw for these decisions of course: a stable country with a transparent and stable legal system, a sensible investment regime, and an experienced and helpful regulator - these factors are clearly important. So is the drive to stay up to speed with international standards such as IFRS17 and be on the right side of the AML regulations. Zambia has done the work and ticks a lot of boxes.
The Human Advantage
Another benefit of operating in Zambia is the availability of knowledgeable and experienced personnel. It is very common in developing countries like Zambia to hear about a lack of experienced staff, a lack of underwriting knowledge or a shortage of qualified people. I’ve visited insurance markets this year where firms are bringing experienced staff out of retirement, and one case where a gentleman found himself CEO again at the age of 75.
The availability of trained actuaries is a common complaint in developing markets, but the Actuarial Society of Zambia has fostered this profession for some years. Two universities offer degrees in Actuarial Science, and one offers a postgraduate qualification.
Looking Forward
Landlocked African nations do not have it easy, so Zambia's emergence as a reinsurance hub is particularly impressive. The country has built an ecosystem that attracts international reinsurance operations while maintaining domestic market stability. New entrants like Klapton Re and Finsbury Re recognise this potential.
This development of a regional reinsurance centre showcases Zambia's strengths and is a success story that deserves a closer look.
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