Insuring DR Congo Projects Against Political Violence

This article appears in the November issue of Global Finance Magazine.

Political violence insurance premiums for some mining risks in the Democratic Republic of Congo jumped as much as tenfold last year, turning insurance from a routine operating cost into a material consideration for companies exposed to the country’s deteriorating security environment.

Political violence premiums “spiked five to ten times” as a result of the upsurge, which included conflict with the M23 rebels in the east as well as anti-government protests in the capital, said Valéry Safarian, managing partner at Triangle Partners and an adviser to the board of SFA Congo, the republic’s second-largest insurer.

The financial impact was visible at SFA. Its political violence portfolio doubled to $6 million in 2025 while overall turnover rose from $73 million in 2024 to more than $81 million, Reuters reported in February. Mining companies including CMOC Group, Glencore, Eurasian Resources, and Chemaf were among those affected.

The DRC episode does not mean insurance prices are rising across Africa.

Marsh’s second-quarter Global Insurance Market Index shows the opposite trend for much of the commercial market. Rates across the insurance broker’s India, Middle East, and Africa region fell 16%, the largest regional decline among its indices. Property rates fell 19% while political violence rates stabilized as additional markets supplied capacity.

The figures expose an important split in the African investment risk market: Capacity is plentiful, driving down prices in many conventional insurance lines, while specialist risks can still experience abrupt movements in premiums, limits, and deductibles.

For Lesley Ndlovu, CEO of AfrexInsure, the distinction is fundamental.

“The issue is not simply rising premiums,” he said. For major African projects, the more important questions are whether investors can secure sufficient limits, appropriate deductibles, and the coverage required for the project’s value and tenor.

The capacity equation can have consequences well beyond the premium itself. Where required, insurance cannot be obtained, Ndlovu said. Sponsors may have to retain more risk or provide additional capital while lenders can impose tighter conditions.

“The tipping point is when insurance terms begin to change the financing case for the project,” he said.

For Safarian, the DRC experience demonstrates why there is no single premium threshold that determines whether an investment remains viable. The calculation depends on expected returns, financial resilience, and critically, how much of the underlying exposure can be transferred to insurers and reinsurers. “Capacity can matter more than price.”

An investor may accept a higher premium if adequate protection is available. The more difficult situations arise when limits are reduced, deductibles rise, or exclusions leave risks that investors cannot comfortably retain.

“The tipping point comes when that combination makes the expected return unattractive or when available coverage no longer meets lenders’ requirements,” Safarian said. “At that stage, insurance constraints can become financing constraints.”

The DRC market shows how rapidly the equation can change.

Political violence premiums rose sharply when fighting escalated in the eastern DRC in 2025, Reuters reported, while SFA’s political violence portfolio doubled. As security conditions improved and insurance market capacity returned, premiums began moving back toward earlier levels.

The wider Congolese insurance market has also expanded sharply. Non-life premiums reached approximately $350 million last year, compared with $67 million in 2018, when the country liberalized its insurance market, according to Reuters. But the subsequent easing of political violence premiums did not eliminate the problem for long-term investors.

Political violence insurance relies heavily on global reinsurance capacity. When reinsurance capacity contracts, limits become harder to secure and prices can rise sharply. When capacity expands, buyers gain more options and pricing can moderate.

For an investor committing capital for 10, 15, or 20 years, that creates risk beyond the price quoted at financial close: whether adequate protection will still be available at renewal.

“Continuity of capacity matters as much as short-term price relief,” Safarian said.

That concern is particularly relevant to mining, energy, infrastructure, and trade projects, where financing agreements can require specified insurance protections throughout the life of an investment.

The wider insurance market, meanwhile, provides evidence that capacity can materially alter pricing.

Global commercial insurance rates fell 6% in the second quarter, according to Marsh, marking the eighth consecutive quarterly decline. Global property rates fell 12%. Marsh attributed the broader softening to abundant capacity, strong insurer competition, surplus capital, lower reinsurance costs, and strong insurer profitability.

Insurers were competing on price, said John Donnelly, president of Global Placement at Marsh, but also through “broader coverage, expanded policy terms, and lower deductibles.”

That matters for African investors, because cheaper premiums are only one component of the risk-transfer equation. Better terms, higher limits, and lower deductibles can also affect the amount of capital a project needs to retain against potential losses.

The political risk market illustrates the continuing demand for capacity. Demand for African credit and political risk insurance “often outstrips supply on an annualized basis,” Benjamin Mugisha, chief underwriting officer at African Trade and Investment Development Insurance (ATIDI), a multilateral investment and credit insurer, said in May.

Mugisha identified Côte d’Ivoire, Egypt, and South Africa among markets where demand was particularly strong, driven by foreign direct investment (FDI), infrastructure financing, and lending activity.

The African Development Bank is putting additional capital behind that risk-transfer architecture.

In May, the ADB board approved a $125 million equity investment in ATIDI, aimed at strengthening its capital base and expanding political risk and credit insurance products supporting FDI and intra-African trade. ATIDI said it has supported investment and cross-border trade into Africa valued at $93 billion since inception and has 38 shareholders as of May.

The transaction is therefore not simply an insurance-sector expansion, but rather an effort to increase the amount of risk that can be transferred away from investors, lenders, and project sponsors. That distinction is becoming increasingly important as African economies seek private capital for infrastructure, energy, mining, manufacturing, and regional trade.

Insurers should be involved before the financing package is finalized, Ndlovu said: “The key therefore is to involve insurers before financial close, not after project design is complete.”

His argument is that project sponsors can first reduce the underlying exposure through engineering, resilience measures, security arrangements, contractual allocation of risk, and project redesign. Insurance, reinsurance, guarantees, and political risk instruments can then be applied to residual risks.

The same logic holds for data.

“Africa’s protection gap is not only a capital gap, but also a data gap,” Ndlovu said, pointing to the need for stronger underwriting information alongside additional insurance and reinsurance capacity.

The evidence therefore does not support a blanket conclusion that insurance is making African investment too expensive. The more precise problem is selective scarcity.

Commercial insurance capacity is sufficiently abundant in many lines to produce substantial rate reductions. But demand for coverage of political violence, war, specialist mining exposures, and complex infrastructure can still run up against constrained capacity, higher deductibles, reduced limits, and narrower coverage.

For investors, the resulting calculation is broader than the premium. It includes how much risk remains on the project’s balance sheet, how much capital must be held against that exposure, whether lenders’ insurance requirements can be met, and whether the same protection will be available at the next renewal.

The DRC’s five- to tenfold political violence premium shock demonstrates the potential scale of the problem. Marsh’s 16% IMEA rate decline demonstrates the other side of the market: when capacity is abundant, insurance costs can fall rapidly.

The investment question is therefore increasingly about capacity, continuity, and terms, not simply price. When those three elements deteriorate simultaneously, insurance stops being a line in a project’s operating budget and becomes part of the financing equation itself. 

Charles Wachira is a contributing writer based in Kenya.