African Reinsurance Navigator: How CRe Defies Currency Headwinds

LONDON, UK – December 04, 2025

In a resounding vote of confidence amid severe economic turbulence, global rating agency AM Best recently affirmed the ‘Good’ credit ratings for Continental Reinsurance Plc (CRe Nigeria), the operational cornerstone of the pan-African Continental Re group. While a stable rating outlook for a major financial institution might seem like routine news, the context surrounding this affirmation reveals a masterclass in strategic resilience and a potential blueprint for navigating the volatile currents of emerging markets.

Continental Re has not only weathered the storm of currency devaluations and soaring inflation in its key African markets but has proactively fortified its financial foundations. The company's strategy—a blend of disciplined underwriting, controlled growth, and a significant pivot toward offshore investments—offers critical insights into how foundational industries can secure stability, thereby underpinning the continent's broader ambitions for infrastructure development and economic growth.

The Currency Conundrum and a Strategic Pivot

The economic landscape in which CRe operates has been anything but stable. Nigeria, its home market, has faced a particularly challenging period. The Nigerian Naira depreciated by over 40% against the US dollar in 2024 alone, while inflation surged to a nearly three-decade high of 34.6%. This macroeconomic instability creates immense pressure on corporate balance sheets, eroding asset values and complicating risk-adjusted capital calculations.

Faced with this persistent volatility, Continental Re has executed a decisive strategic pivot. The company has begun shifting a substantial portion of its surplus assets away from local markets and into safer, more stable offshore instruments. According to AM Best, CRe Nigeria has been actively investing in U.S. treasuries since 2023, with these offshore holdings projected to constitute nearly 25% of its total investment portfolio by mid-2025.

This move is a direct and powerful hedge against local currency risk. By holding a significant portion of its assets in U.S. dollars, the reinsurer insulates its balance sheet from the erosive effects of Naira devaluation. The strategy not only preserves capital but also enhances the overall credit quality of the group’s investment portfolio, a key factor in AM Best's positive assessment. The impact is tangible: while CRe Nigeria's reported return-on-equity (ROE) was a modest 7.9% in 2024, adjusting for foreign exchange gains reveals a far more robust adjusted ROE of 44.6%, underscoring the effectiveness of its forex management.

Deconstructing the 'Good' Rating

AM Best's affirmation of the B+ (Good) Financial Strength Rating and "bbb-" (Good) Long-Term Issuer Credit Rating is built on several core pillars of CRe's performance and strategy. The agency assesses the company's balance sheet strength as "very strong," a designation underpinned by its risk-adjusted capitalisation, which consistently remains at the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR).

However, this strength has been tested. The report notes that the group's capitalisation has been volatile, driven by the dual pressures of rapid business growth and the aforementioned currency devaluations. In response, CRe has demonstrated strategic foresight by throttling back its expansion. The company is now targeting more moderate growth in the medium term, a move designed to enhance capital management and ensure sustainability over sheer scale. This disciplined approach is complemented by ongoing improvements in underwriting. The company has maintained a non-life combined ratio in the mid-90s since 2020, hitting 94% in 2024, which signals strong risk controls and operational efficiency even as revenue grew 120% to NGN 248 billion.

This combination of a fortified balance sheet, adequate operating performance despite headwinds, and a more controlled growth appetite paints a picture of a company actively managing its risk profile. The offshore investment strategy is the lynchpin, directly addressing the primary external threat to its financial stability and demonstrating a level of sophisticated enterprise risk management that bolsters investor and client confidence.

A Pan-African Blueprint for Growth and Resilience

Continental Re's strategy extends far beyond its investment portfolio. The company's identity as a truly pan-African reinsurer is a core component of its resilience. With a presence in over 50 African countries serviced by six regional offices from Tunis to Gaborone, CRe has built a geographically diversified revenue stream that is not overly reliant on any single economy.

This diversification is proving its worth. While the Nigerian and Kenyan markets have faced macroeconomic challenges, regional offices in Tunis, Douala, and Abidjan posted strong underwriting results with combined ratios below 90%. This distributed performance model allows the group to absorb localized shocks and maintain overall profitability. The recent corporate restructuring, which saw Lawrence Nazare appointed to oversee pan-African operations from Botswana and Dr. Fatai Kayode Lawal to lead the West African hub in Nigeria, further refines this regional focus.

This pan-African footprint is crucial when benchmarked against peers. While a giant like African Reinsurance Corporation boasts higher ratings, CRe's proactive strategy for managing currency risk and its deep regional diversification position it as a formidable and resilient player. Its approach differs from competitors like East Africa Re, which has a more concentrated exposure to its domestic Kenyan market, highlighting the strategic advantage of CRe's broader continental platform.

Financial Stability as Critical Infrastructure

For a continent poised for significant investment in next-generation mobility, smart cities, and sustainable energy, the stability of its financial infrastructure is paramount. Reinsurance is the ultimate backstop for risk, the invisible financial scaffolding that makes large-scale, long-term projects possible. Without a robust and creditworthy reinsurance sector, the ability to insure complex infrastructure projects—from high-speed rail networks to sprawling renewable energy farms—is compromised, deterring the very investment Africa needs to build its future.

In this context, Continental Re's successful navigation of economic volatility is more than just a corporate success story. It is a demonstration of how critical financial institutions can build resilience, ensuring they can continue to play their vital role in enabling progress. By proactively managing currency risk, diversifying across the continent, and maintaining disciplined underwriting, CRe is not just protecting its own balance sheet; it is reinforcing the financial bedrock upon which Africa's connected future will be built. The company's journey offers a compelling case study for how to foster stability and confidence in some of the world's most dynamic and promising markets.