Spotlight on Africa
The African market is healthy but strict, with insurers demanding strong risk management (ESG, valuations, hot work, tailings, surveys) for capacity, especially with ongoing climate volatility, grid issues (Eskom loadshedding), potential water challenges and operational costs.
There has been a reduction in claim volumes but an increase in claim severity / average cost per claim. Insurers are becoming more cautious due to recent large losses and high loss ratios, putting strong emphasis on robust risk management practices and accurate asset valuations.
While some areas see stable or better pricing for well-managed risks, insurers focus on profitable growth, requiring detailed risk data and scrutiny on business interruption, making capacity tighter for less-preferred risks, even as new financing/guarantee tools emerge. For well managed risks we are seeing rate reductions of up to 15% in the Assets and Liability markets.
Insurers require comprehensive risk submissions and are focusing on these specific areas:
Accurate valuations: regular and accurate asset valuations are a key requirement
Business Interruption (BI): BI declarations face increased scrutiny where insurers require a computation to be submitted by the client
ESG and Thermal Coal: ESG performance is a major factor in underwriting decisions. Miners with strong ESG credentials, particularly those with clear energy transition plans, are likely to receive more favourable pricing and capacity. In contrast, thermal coal operations face limited insurer interest and stricter terms
Regulatory compliance: adherence to Department of Mineral Resources and Energy (DMRE) requirements, such as those outlined in the Mine Health and Safety Act, is critical
Emerging risks: there is increased focus on new and evolving risks such as seismicity, extreme weather events (flooding), infrastructure issues (like grid stability/Eskom and water challenges) and the associated coverage limitations
Commodity pricing: insurers require detailed, justifiable, and transparent assumptions regarding commodity prices, particularly for business interruption (BI). The goal is to ensure potential claims reflect actual losses and prevent the insured from profiting from the insurance payout
Tailings and geotechnical risks: following recent global failures (e.g. Çöpler mine), insurers demand information on the design and management of tailings storage facilities and leach pads. Adherence to the GISTM is becoming a baseline expectation for favourable terms
Natural catastrophes (Nat Cats): the increasing frequency and severity of weather-related events (e.g. floods, wildfires) is leading to higher scrutiny and potentially higher premiums in high-risk regions
Sufficient capacity and better pricing exist for well-run mines, but challenges remain for complex global programs or less preferred risks. Insurers are using data-driven models, geo-coded risk mapping, and predictive analytics (especially for natural catastrophes) to assess and price risks more accurately.
2026 outlook
The market is expected to remain favourable for buyers, with ample capacity, increased competition, and continued downward pressure on rate. However, this is tempered by a growing focus on specific, complex risks and strong insurer scrutiny on risk management practices. The market remains cyclical, and a single large loss event could change the landscape rapidly.
The market is expected to remain favourable for buyers, with ample capacity, increased competition, and continued downward pressure on rate
Getting the most out of the market
Companies should prepare well ahead of renewal and provide detailed submissions with supporting information for insurers review. If possible, buyers should conduct a renewal roadshow to meet insurers face-to-face to and tell their story. Alternatively, updating markets via virtual sessions can work in the insured’s favour. Insurers aim to foster stronger partnerships with mining companies and brokers to improve overall risk mitigation and ensure continued insurability in a volatile landscape. Providing insurers with continuous feedback and updates leads to stronger relationships and provides insurers with comfort that risk management is being prioritised.
In essence, disciplined underwriting in the African mining sector has shifted the focus from a soft market driven by price competition to a more technical and risk-focused approach, rewarding resilient operations and proactive risk managers.