Namibia Insurance Report Q4 2017

Namibia Insurance Report Q4 2017

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The outlook for Namibia's insurance markets is quite strong, assuming that our core scenario of a strong economic recovery kicks in from late 2017 onwards. Growth in Life premiums should average more than 5.0% each year over the next five years in local currency terms while annual growth in the nonlife sector should be in the double digits, with even stronger growth in US dollar terms, thanks to an expected recovery in the value of the Namibian dollar. A weaker than expected economic recovery would have bigger implications for the non-life sector, which is more cyclically sensitive than the life sector.

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The outlook for Namibia's life insurance market is moderately strong, helped by a likely imminent recovery of economic growth from a recent recession and by declining inflation, which should continue to fall, after dropping to 5.4% year-on-year in July 2017. We forecast that life premiums will expand by an average of 6.1% per year over the period 2017 to 2021 in nominal local currency terms, while growth in US dollar terms should be stronger than this, reflecting a recovery in the value of the Namibian dollar against the greenback, after a recent bout of weakness.