Congo fighting drove spike in insurance costs, squeezing miners, insurer says
Insurance executives said that the cost of copper and cobalt mining increased as well as insurance premiums for political violence in Democratic Republic of Congo. This was due to the unrest in eastern DRC, which boosted 'insurers' but also 'lifted costs for copper-cobalt miner.
In January 2025, AFC/M23-backed rebels from Rwanda overran Goma in eastern Congo. This was part of a larger advance by the group that saw it seize more land than ever.
The violence caused widespread business closures and left thousands dead. Hundreds of?thousands were displaced.
Congo's No. SFA is the No.2 insurer in Congo. It gets about a quarter its business from mining, and it covers?about 50% of the operators.
Valery Safarian is the adviser to the board at SFA Congo. He said that political violence premiums had "risen five to ten-fold after the events", before decreasing this year, as the calm returned and the market capacity improved.
He said that the shock had doubled SFA’s portfolio of political violence from $3 to $6 million in just a year.
SFA General Manager Xavier Denys stated that demand surged "almost over night" as companies rushed in to renew or obtain fresh coverage.
CONGO HOLDS LARGE MINING RESERVES
Congo is home to more than 70% the world's cobalt, and also has some of the richest reserves of copper, lithium and coltan.
CMOC (China),?Glencore?, Eurasian Resources, and Chemaf are all major operators.
Safarian claimed that mines were spared direct attacks from the offensive. Retail and industrial customers suffered most of the damage.
Denys stated that industrial risks, such as property damage, pit collapsing, machine breakdowns and tailings-dam failures, remained among the "biggest exposures".
He said that as rates soared, new reinsurance companies entered the market. They added capacity to the market and pushed premiums towards their pre-crisis levels in January.
Denys stated that since the Congo liberalised its market for insurance?in 2018 non-life premiums grew fivefold from $67 to $350 million by 2025.
SFA's revenue grew?from $73 millions in 2024 to over $81 million by 2025.
SFA is planning to expand its business into the neighbouring markets as local technical capabilities improve.
Safarian stated, "Our goal is turning DRC into an export hub for expertise outside of our borders." Maxwell Akalaare Adombila reported. Mark Potter edited the article.
(source: Reuters)