After nearly two decades of consistent growth, spurred by economic boom in the region, the insurance market of Sub-Saharan Africa (SSA) is now threatened by low commodity prices and political uncertainty associated with upcoming elections in around 15 African countries, the        ratings agency AM Best said in a report published on July 12.

“Low commodity prices, political uncertainty, the slowdown of China’s economic activity and the impact of monetary tightening by the U.S Federal Reserve threaten to stall growth and stability, and in turn, likely will compromise the development and financial strength of insurance markets across the continent,” the report said.

AM Best refers in this context to the latest sigma study of Swiss Re on global insurance, which estimated that Africa’s insurance markets already fell 8.5% last to $64.1 billion.

Citing data recently released by the World Bank, AM Best highlights that SSA’s GDP slowed to 3% in 2015, against 4.5% in 2014 and compared to an average of 6.8% from 2008 to 2013.

“Fears resurface and all the progress that was made so far could be nullified. The continent could sink back in the dark period before 2000 during which it recorded by a severe debt crisis, conflicts, extreme poverty, strong inflation and massive corruption,” it said.

AM Best believes that volumes of premiums generated in some economic sectors such as real estate and construction could drop as many infrastructure projects are called off or halted.

However, the agency still expects the insurance sector to remain attractive for foreign investors in the years to come, mainly because of the low penetration rates recorded in the region paired with a continuous improvement of regulations.