The African continent is a region of unparalleled growth, but it also stands on the frontline of a triple threat: political shocks, climate change, and economic pressures. For Managing General Agents (MGAs) and local insurers in Africa (mostly in the CIMA zone), it is imperative to integrate these systemic risks to ensure portfolio profitability and sustainability.

1. The Impact of Political and Social Risks
Political and social risks in Africa are no longer limited to civil wars but include instability arising from governance, social tensions, and contractual disputes.

The Underwriting Paradigm Shift
Old Model

New Risk to Integrate

MGA Strategy
Basic War/Terrorism coverage. Strikes, Riots, and Civil Commotion (SRCC) linked to inflation or contested elections.

Aggregate Modeling: Determining the maximum potential aggregate loss for a single city (e.g., Abidjan or Douala) and a single event, often through Facultative Reinsurance for large risks.

Sovereign risk is managed at the national level. License Cancellation or Withdrawal and Contractual Disputes (default by a state on a major project).

Political Risk Insurance (PRI): Utilizing MGA expertise to assess the legal framework’s strength and the history of disputes involving the state before offering coverage.