Namibia’s insurance industry likely to remain resilient over the near term supported by strong sector dynamics in the face of persistent sluggish local economic performance compounded by COVID-19 pandemic risks
Despite persistent sluggish local economic growth, compounded by COVID-19 pandemic risks, GCR expects the Namibian insurance sector to remain resilient in the near term, supported by strong sector dynamics and relatively high insurance density and penetration. This was largely supported by Namibia’s relatively high insurance penetration and density of around 7% and USD417 respectively, which ranks second to South Africa (13% and USD768) in Sub-Saharan Africa.
Overall, the transmission of any potential weakness in earnings to capital depends on the capital buffers built to date. GCR is of the view that the majority of the groups have high solvency margins, or equivalent risk mitigation arrangements that could absorb losses from a severe scenario like the COVID-19 pandemic, without a material impact on their credit profiles.