Africa’s main trade and political risk insurer is trying to raise $500 million. Costs linked to the US/Israel – Iran war are rising fast, and demand for cover is climbing.
The African Trade & Investment Development Insurance (ATIDI) wants to lift its capital base to about $1.5 billion. The goal is simple: keep writing business as risks increase across its member countries.
Executives say the pressure is already visible in higher claims and larger insured exposures. Energy costs and trade disruption are feeding directly into the insurer’s books.
“We are seeing a clear increase in demand and risk at the same time,” ATIDI’s CEO, Manuel Moses told Reuters.
The insurer is also considering a $1 billion emergency facility. That points to concern that current shocks may last longer than expected.
Capital under strain
ATIDI’s model depends on scale. Each dollar of capital supports multiple dollars of trade.
That model works in stable markets. It becomes tighter when claims rise and volatility spikes.
Countries are asking for more coverage as import costs increase, especially for fuel. The insurer has limited room to respond without new capital.
If funding falls short, capacity will tighten. Premiums could rise, and some risks may go uninsured.
Inflation bites hard
The US/Israel – Iran war has pushed up oil and commodity prices. Shipping routes are less reliable, and costs are higher.
Many African economies rely on imported energy. Higher prices feed quickly into inflation and weaker currencies.
That raises the value of insured trades and increases default risk. Buyers struggle to pay on time when costs jump.
Inflation is hitting both sides of the balance sheet. Claims grow larger, and payment risk increases at the same time.
System risk grows
External support is not what it used to be. The development aid is slowing, leaving regional players to absorb more shocks.
At the same time, risks are moving together. Energy, credit and sovereign stress are no longer separate issues.
That makes diversification less effective. Losses can hit several markets at once.
A prolonged shock could stretch insurers beyond their limits that would disrupt trade finance and slow investment flows.
ATIDI is trying to stay ahead of the problem. But the gap between risk and capacity is widening. If it grows further, trade across parts of Africa could start to feel the strain.
