Rising global petroleum prices triggered by the Middle East conflict are beginning to strain Africa’s insurance sector and broader economic outlook, industry leaders have warned, citing mounting risks to growth, inflation and financial stability.
Executives and regulators speaking at a continental reinsurance summit in Kigali said the surge in energy costs is rippling across economies, driving up operating expenses, weakening investment returns and increasing claims risks for insurers.
“We know that the rise in petroleum prices will have a huge impact on the rest of the economy,” said Godfrey Kiptum, head of the Insurance Regulatory Authority of Kenya. “Production may go down, and we could see a repeat of past disruptions.”
Global oil prices remain well above pre-conflict levels, when Brent crude traded below US$73 per barrel before the outbreak of the Iran war, intensifying cost pressures for oil-importing economies across Africa.
The knock-on effects are already visible. Higher fuel costs are feeding into inflation and pushing up interest rates, creating a challenging environment for insurers. Industry players say this could lead to rising claims costs, reduced profitability and tighter liquidity conditions.
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Kiptum warned that Kenya’s economic growth outlook is weakening, with projections revised down from around 5.2 percent to closer to 4 percent, reflecting broader regional trends.
The impact is expected to be particularly severe for countries heavily dependent on imported fuel, which face deteriorating trade balances and increased fiscal strain if high prices persist.
Insurance markets are also seeing early signs of stress. Premiums for maritime transport, energy and geopolitical risk coverage have already begun to rise, reflecting heightened uncertainty and risk exposure linked to the conflict.
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In Zimbabwe, regulators are closely monitoring the situation, citing vulnerabilities linked to the country’s heavy reliance on the U.S. dollar. More than 80 percent of transactions are conducted in the currency, amplifying the transmission of global shocks into the domestic economy.
“We are really monitoring the impact,” said Grace Muradzikwa, noting that authorities are tightening oversight of insurers’ cost structures and capital positions.
Zimbabwe has implemented a risk-based capital framework to ensure insurers maintain sufficient buffers against rising risks, she added.
In Ghana, officials say the conflict has reversed recent gains from falling fuel prices, with potential spillovers expected across insurance lines.
“Before the war, our economy had been improving… but it has now gone up because of the war,” said Abiba Zakariah.
She noted that while war-related risks are not widely covered in Ghana’s insurance market, the broader impact could lead reinsurers to raise premiums or withdraw certain types of coverage altogether.
Elsewhere, Rwanda is experiencing rising inflationary pressures, although growth is expected to remain relatively strong at over 7 percent in 2026, albeit slower than the previous year.
Analysts say the insurance sector’s exposure reflects its close ties to economic activity, with higher costs, slower growth and increased uncertainty all feeding into industry performance.
If global tensions persist, insurers could face a prolonged period of elevated risk, potentially constraining their ability to support economic activity through underwriting and investment.
The warnings underscore the broader vulnerability of African economies to external shocks, particularly in energy markets, and highlight the need for resilience as policymakers grapple with the fallout from global geopolitical tensions.
