• IFC plans a guarantee facility of up to $50 million for Nairobi-based reinsurer ZEP-RE.
• The mechanism aims to strengthen the company’s credit risk profile and expand its business across Africa.
• The move comes as African reinsurers seek a larger share of a market still dominated by global players.

The International Finance Corporation (IFC) is preparing to deploy a guarantee facility of up to $50 million in support of ZEP-RE (PTA Reinsurance Company), the Nairobi-based pan-African reinsurer. The operation was approved by the IFC board on December 22, 2025 and formalized nine days later. It is now awaiting disbursement.

The mechanism is designed to cover ZEP-RE’s reinsurance credit risk. It will allow the company to select a portfolio of business considered more profitable and higher quality while expanding its footprint across the continent.

Founded in 1990 at the initiative of heads of state from the former Preferential Trade Area (PTA), now the Common Market for Eastern and Southern Africa (COMESA), ZEP-RE is one of the few African reinsurers with a regional mandate. Its shareholder base includes about ten member states—among them Kenya, Ethiopia, Zambia, Zimbabwe, Rwanda, Uganda, and Malawi—along with continental financial institutions such as the African Development Bank and Afreximbank, as well as African and international insurance operators.

A growing market still dominated by foreign players

Africa’s reinsurance market generated $6.3 billion in premiums in 2024, accounting for only 1.6% of global underwriting, according to data from Atlas Magazine. The figure remains modest compared with the continent’s potential, but it is growing—up 8.8% year on year and 89% over the past decade.

A structural issue persists. Foreign reinsurers, led by the African subsidiaries of Munich Re, Hannover Re, and SCOR, capture between 70% and 80% of African premiums, leaving local players with less profitable segments.

In response to this outflow of capital, several regulators have tightened the rules. The principle is that before placing risks on international markets, insurers must cede a fixed share of their treaties to a designated local or regional reinsurer.

Kenya is considering raising this mandatory cession to 25% in favor of Kenya Re, up from 20% currently. Uganda requires cumulative cessions of 15% to Uganda Re, 10% to ZEP-RE, and 5% to Africa Re. The CIMA zone applies a similar mechanism benefiting CICA-Re.

This regulatory shift is part of a broader effort to retain more premiums within African markets. ZEP-RE and Africa Re—whose share represents about one-fifth of the continent’s premiums—are seeking to strengthen their positions against global competitors.

Beyond traditional reinsurance, ZEP-RE has also developed direct microinsurance products targeting underserved segments. As part of the financing, the IFC plans to provide technical support to help develop digital risk management solutions.

These tools are expected to focus particularly on smallholder farmers and African small and medium-size enterprises, especially those led by women.

Fiacre E. Kakpo