A Private Equity Exit, a Pan-African Reinsurer, and a Test for BSE

Continental Reinsurance Holdings is about to do something no company has done before on the Botswana Stock Exchange. The question is whether investors will follow.

For four decades, Continental Reinsurance has operated in the shadows of Africa’s insurance market; underwriting risks that global reinsurers preferred to avoid, building offices in cities where competitors saw only instability, and collecting premiums in currencies that could lose a third of their value in a single quarter. It was a profitable, if unglamorous, existence.

On October 5, the company will step into the light. Continental Reinsurance Holdings Limited, known as Cre, is scheduled to list on the Botswana Stock Exchange’s Main Board in an initial public offering worth roughly 2.1 billion pula, or about $156 million. It will be the first time a private-equity shareholder has exited an investment through a Botswana listing of this nature. It will also be a referendum on whether a pan-African reinsurer with exposure to some of the world’s most volatile currencies and political environments can win the confidence of public-market investors.

The IPO is, in essence, two transactions folded into one. The larger piece – 1.7 billion pula – is an offer for subscription, fresh capital that will flow directly into the business to fund its next chapter.

For Botswana’s capital markets, the listing is a milestone. For Continental Re, it is a turning point. And for investors weighing whether to participate, it is a proposition rich in both promise and peril.

The untapped market

Start with the promise. Africa’s reinsurance market was valued at over $7.4 billion in 2022, and it has been growing at double-digit rates for the past five years. Between 2015 and 2024, the market expanded by 89 percent; outpacing the direct insurance market by 33 percentage points. Yet the continent accounted for just 1.6 percent of global reinsurance premiums in 2024, a share that looks absurdly thin when you consider that Africa holds nearly a fifth of the world’s population and is home to some of its fastest-growing economies.

The structural drivers are compelling. Average cession rates – the share of premiums that insurers pass on to reinsurers – run between 28 and 35 percent across most African countries, well above global averages, and are expected to remain elevated. Rising incomes push insurance penetration upward; as GDP per capita climbs, people buy more cover, and the compounding effect is significant. Infrastructure investment demands insurance, and Africa is building. Climate change demands more of it, and Africa is warming faster than the global average. Regulatory reforms in country after country are designed to retain more premium within African borders rather than seeing it flow to reinsurers in London, Munich, or Bermuda.

All of this creates what Motswedi Securities, which published the initial coverage report on CRe, describes as a “structural growth story.” And CRe, as one of the largest independent pan-African reinsurers excluding South Africa, is positioned to capture it.

Founded in 1985, the group now operates across more than 50 African countries from seven regional offices. Its gross written premium reached 2.26 billion pula in 2025, and it is forecast to hit 2.86 billion pula by 2028. The business is diversified across six economic zones: Anglophone West Africa contributes 34 percent of gross premium written; Eastern and Southern Africa, 38 percent; North Africa, 15 percent; and Central and Francophone West Africa, 13 percent. That geographic spread is not decorative. It is the company’s primary defense against localized shocks – a drought in East Africa does not wipe out premium income from North Africa’s energy sector, and political unrest in one West African state does not paralyze the group.

The capital-light bet

The most interesting thing Continental Re plans to do with the $30 million in fresh capital does not involve underwriting more risk in the traditional sense. It involves underwriting less.

The company is establishing an Alternative Solutions business; a fee-based risk intermediation model that connects African insurers and corporate clients with global reinsurance and capital providers. Think fronting arrangements, portfolio and risk transfer solutions, captive support, and structured reinsurance. The income is fees and commissions, not premiums. The balance sheet consumption is minimal.

This is a strategic bet worth watching. In a continent where reinsurance capacity is scarce and global reinsurers are often reluctant to deploy capital directly, an intermediary with deep local knowledge and a pan-African footprint can extract significant value from simply being the bridge. If it works, the Alternative Solutions business could enhance return on equity while reducing earnings volatility – the twin goals of any well-run reinsurer.

For 2025, CRe reported a return on equity of 7.5 percent and a return on investment of 6.6 percent. The combined ratio; the measure of underwriting profitability, where anything below 100 percent means the insurer is making money on its core business; came in at 92 percent, improving from 94 percent the prior year. By 2028, Motswedi Securities projects the combined ratio will settle at 90.4 percent. These are not blockbuster numbers by the standards of global reinsurers, but they are solid for a business operating across 50-plus African jurisdictions, many of which are rated below investment grade.

The group also benefits from an International Financial Services Centre certification in Botswana, which grants it a reduced 15 percent corporate tax rate. In a business where margins are measured in single digits, a favorable tax regime is not a rounding error; it is a competitive advantage.

The currency problem

Now the peril. It arrives in the form of foreign exchange, which is both CRe’s most material near-term risk and the reason its financial statements can be difficult to read at a glance.

The group operates across more than 50 African countries with significant exposure to structurally weak currencies – the Nigerian naira, the Kenyan shilling, the Egyptian pound. In 2022 and 2023, CRe’s revenue declined despite underlying business growth because local-currency devaluations erased gains when translated into pula or dollars. The 2024 profit after tax of 82.7 million pula looks anemic compared with the 348.7 million pula recorded in 2023, but the drop was largely driven by one-off foreign exchange dynamics tied to the devaluation of the naira, which had been CRe’s previous reporting currency.

Management is working to reduce this exposure. Roughly 60 percent of shareholders’ funds are now held in hard currencies, and the target is 75 percent. But residual local-currency exposure remains a persistent drag on reported results. For an investor accustomed to the relatively clean financials of developed-market insurers, CRe’s income statement demands patience and a tolerance for translation noise that does not reflect operational reality.

The geographic concentration compounds the currency risk. Nigeria, CRe’s single largest operating subsidiary, accounts for a substantial share of Anglophone West Africa’s 34 percent contribution. Nigeria carries sovereign risk, regulatory risk, and the kind of capital-repatriation constraints that can turn paper profits into stranded cash. Eastern and Southern Africa, contributing 38 percent, includes markets like Ethiopia and Zimbabwe where political and macroeconomic instability are not theoretical concerns but recurring events.

Climate and competition

Two more risks deserve attention. The first is climate. Africa is the continent most vulnerable to climate change and the least insured against it. For a reinsurer, that combination is both an opportunity and a threat. Rising demand for climate-related cover is good for premium growth; rising frequency and severity of natural catastrophes is bad for claims. CRe’s portfolio includes agricultural reinsurance (2 percent of revenue) and energy reinsurance (5 percent), both of which are directly exposed to weather-related losses. The group is developing parametric insurance products; policies that pay out automatically when a trigger is met, such as rainfall falling below a threshold ; which could help manage climate risk more precisely. But the development is early-stage, and the claims volatility from existing portfolios remains real.

The second is competition. The reinsurance market is crowded, and CRe faces pressure from both regional rivals and well-capitalized global players. The globals – the Munich Res and Swiss Res of the world – can underwrite at prices that smaller players struggle to match during soft markets, and they can absorb losses that would threaten a pan-African reinsurer’s solvency. CRe’s retrocession panel, the reinsurers that backstop its own risks, has improved markedly: 73 percent of retrocession was placed with A-rated or above partners in 2024, up from 55 percent in 2022, and zero non-rated partners remain. That is a sign of discipline. But discipline does not eliminate pricing pressure, and it does not guarantee that CRe can retain market share when a global reinsurer decides to muscle into a lucrative treaty.

The valuation

At the offer price, CRe is valued at a price-to-book ratio of 1.21 times. Book value per share stands at 0.825 pula. The company carries zero gearing.

Is 1.21 times book cheap? For a pan-African reinsurer with a 92 percent combined ratio, a 7.5 percent return on equity, diversified revenues across six economic zones, a 15 percent tax rate, and exposure to what may be the most underpenetrated reinsurance market on the planet; it is not obviously expensive. For a company whose largest shareholder is exiting, whose profits are denominated in volatile currencies, and whose growth plan depends partly on a business line that does not yet exist; it is not obviously cheap either.

The dividend policy offers a signal of management’s confidence. The board intends to distribute between 40 and 60 percent of net income annually. This is a stated intention, not a guarantee, and the fine print notes that actual dividends will depend on each year’s financial performance. Still, for a business that has been profitable and growing through four decades of African economic turbulence, a commitment to return nearly half of earnings to shareholders is a meaningful gesture.

Motswedi Securities recommends investors buy the stock for the medium to long term. The forecast tells the story: profit after tax is projected to rise from 91.8 million pula in 2025 to 174.4 million pula in 2028. Gross written premium is expected to grow from 2.26 billion pula to 2.86 billion pula over the same period. The combined ratio is projected to hold at or below 90.4 percent.

A test for Botswana

The significance of this listing extends beyond Continental Re’s share price. Botswana has spent years trying to establish itself as a financial hub; a credible venue for capital raising, trading, and now, private-equity exits. The CRe IPO is the first known instance of a private-equity shareholder exiting through a BSE listing. If it succeeds; if the offer is well-subscribed, the aftermarket is orderly, and institutional investors come away satisfied ; it will provide a template and a proof point for other private-equity-backed companies considering Botswana as an exit route.

If it falters, the lesson will be equally clear, and equally widely noted.

The Botswana Stock Exchange has long been a small market in search of big narratives. Continental Re offers one: a 40-year-old pan-African reinsurer, profitable through cycles, stepping out of private equity into public markets at a moment when Africa’s insurance gap is wider than ever and the global reinsurance industry is pulling capital toward the risks that matter most.

Whether investors agree; whether they see a structural opportunity or a currency-hemorrhaging operation in unpredictable jurisdictions; will shape not just CRe’s debut, but the story Botswana tells about itself.

The public offer opened on August 5 and closes on September 16. The results will be announced on September 22. By October 5, the market will render its verdict.

Based on Motswedi Securities’ initial coverage report on Continental Reinsurance Holdings Limited, dated August 27, 2026.

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