Prolonged disruption around the Strait of Hormuz has become a real-time test of how quickly geographically distant risks can affect trade, production and financial systems elsewhere.
In the first half of 2025, around 20.9 million barrels of oil passed through the Strait each day, equivalent to about 20% of global petroleum liquids consumption and a quarter of maritime-traded oil. The Gulf is also critical to fertiliser supply, with the Food and Agriculture Organisation (FAO) estimating that 20% to 30% of internationally traded fertiliser products pass through Hormuz.
More than six months into the conflict, commercial traffic remains well below pre-conflict levels, showing how extended disruption at a major chokepoint can reshape the movement of critical commodities rather than simply interrupt it temporarily. For Africa, the significance goes beyond exposure to imported fuel, fertiliser and other essential inputs. It brings greater attention to a question already confronting the continent as its economies expand: can African risk capacity grow at the same pace as Africa’s changing risk profile?
When a distant disruption becomes an African risk
For African economies, these connections are visible well beyond shipping. Changes in energy and freight costs feed into businesses dependent on imported inputs, while supply interruptions can alter inventory requirements, business interruption exposures and replacement costs.
Agriculture makes the transmission particularly tangible. FAO reported that an estimated 3 to 4 million tonnes of fertiliser trade per month stalled due to the Gulf disruption, while agriculture accounted for about 49% of employment in Sub-Saharan Africa in 2025. For a farmer, the chain is much less abstract: higher landed fertiliser costs can affect how much input is applied, influencing yields, household income and ultimately the ability to service agricultural credit.
For insurers and reinsurers, this illustrates a wider challenge. Energy, transport, agriculture, credit and political risks may sit in different underwriting portfolios but accumulate around the same infrastructure, supply chains or economic activity. This places greater importance on exposure data and accumulation management as the continent builds larger ports, refineries, transport corridors and productive assets.
Growth is changing the risk map
Recent disruption has highlighted the strategic value of African trade routes when established corridors are constrained. That geographic advantage becomes more consequential when ports are connected to infrastructure capable of moving goods into and across African markets. Developments such as Lamu and the wider Lamu Port-South Sudan-Ethiopia Transport Corridor illustrate the opportunity to connect maritime access with regional transport, trade and productive capacity.
Christine Gitachu-Mungai is the Head of ZEP-RE Academy
Industrial investment is changing the risk map as well. Nigeria’s 650,000-barrel-per-day Dangote Refinery has reached full capacity and tested production at higher levels, while Dangote has announced plans for further expansion. In East Africa, the planned 700,000-barrel-per-day Lamu refinery would substantially increase refining capacity closer to regional consumption markets and strengthen Lamu’s emerging role as a port, industrial and trade node.
Investments at this scale create economic opportunity, but they also bring larger insured values, more complex engineering, energy and supply-chain exposures, and greater potential for risk concentration. Insurance capacity and technical expertise must develop alongside them.
The foundations already exist
Africa is not starting from a blank page. Established insurance and reinsurance institutions, specialist risk pools and regional mechanisms supporting trade and investment already provide foundations on which to build. Initiatives such as the African Oil & Energy Insurance Pool, COMESA’s Regional Customs Transit Guarantee Scheme and the Trans-Africa Bond Alliance demonstrate how capital, technical expertise and regional risk-sharing mechanisms can develop together.
The challenge is how these existing institutions, mechanisms and expertise can be strengthened and scaled as the risks they are expected to support become larger and more complex.
Capacity is more than capital
Greater continental underwriting and retention capacity require strong balance sheets, but sustainable deployment of that capital also depends on how well the underlying risk is understood. Reliable exposure data, accumulation modelling, actuarial capability, specialist underwriting, claims expertise and risk management all influence how confidently insurers and reinsurers can commit capacity.
The connection becomes particularly important where infrastructure spans sectors and borders, since an incomplete view of exposure can obscure concentrations that become apparent only when a major event occurs. As energy infrastructure and trade corridors expand, and climate and digital risks evolve, the industry will require deeper specialist capability across increasingly complex classes of business.
Within this wider capacity agenda, ZEP-RE Academy has a specific contribution to make through knowledge and technical capability development. Strengthening the expertise on which underwriting, capital allocation and risk management decisions depend, places industry knowledge building within the continent’s risk infrastructure rather than treating it as an activity separate from market development.
The 2027 renewal conversation
As the market approaches the 2027 renewal cycle, global reinsurance capital is abundant, giving cedants considerable choice even as the industry confronts an evolving risk environment shaped by geopolitics, changing catastrophe exposures, cyber risk and new concentrations of infrastructure. The issue is therefore not simply whether capital is available, but whether it can be deployed effectively against risks that are changing in scale and complexity.
For African markets, this makes readiness the more consequential question. Exposure data must identify emerging concentrations, specialist underwriting must develop alongside increasingly sophisticated infrastructure, and capital and regional mechanisms must be capable of supporting the classes in which demand is growing.
Global capacity provides valuable scale and diversification; continental capacity determines how deeply African markets can understand, underwrite and support the risks accompanying their own economic development. These are complementary rather than competing objectives.
Keeping pace with the continent we are building
The disruption around Hormuz did not create Africa’s capacity challenge; it made the consequences of interconnected risk easier to see. At the same time, Africa is expanding refining capacity, developing ports and transport corridors, strengthening trade systems and seeking to produce and trade more within the continent. Each step creates economic opportunity alongside risks of greater value, complexity and concentration.
Greater continental retention must therefore be supported by the capacity that makes it sustainable: capital capable of absorbing risk, data capable of revealing concentrations, and technical expertise capable of understanding, pricing and managing emerging exposures.
Africa has already built important parts of this architecture. The test now is whether we can scale the capital, knowledge and technical capability behind that capacity at the pace of the continent we are building.
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