The potential of the cell captive structure for sub-Saharan Africa

The report examines how cell captive insurance—a model where a licensed insurer creates ring-fenced cells for other organisations—can be used in sub-Saharan Africa (SSA) to bridge gaps in specialised risk cover, drive retail innovation, and facilitate market participation. It identifies four primary use cases: specialised risk management, retail innovation, insurance market participation, and the development of offshore financial centres. The document details three main regulatory models—Protected Cell Companies (PCC), Incorporated Cell Companies (ICC), and Shareholder Participation Agreements (SPA)—and provides a decision tree for regulators to determine the appropriate structure based on their policy objectives, risk transfer needs, and requirements for asset separation, capital, and governance.

• Cell captive structures can address four specific insurance market development needs in sub-Saharan Africa: bridging gaps in specialised risk management, driving retail innovation, diversifying market participation without requiring new licenses, and developing offshore financial hubs.
• Third-party cell captives, where a cell owner covers the risks of their customers or members, are particularly effective for retail innovation and as a formalisation pathway for informal insurance players in SSA.
• South Africa is a global pioneer in third-party cell captives, with over a dozen insurers and more than 300 cells, approximately 70% of which are third-party cells.
• The Protected Cell Company (PCC) is the most prevalent global structure, accounting for about 95% of cell companies, and is currently operational in Mauritius within SSA.
• The Shareholder Participation Agreement (SPA) model, used in South Africa, relies on contractual rather than statutory ring-fencing of assets and liabilities, which the South African Prudential Authority argues preserves the nature of risk pooling in insurance.
• Incorporated Cell Companies (ICCs) provide 'higher and thicker' walls between cells as each is a separate legal entity, but they are generally geared toward infrequent, niche risks due to higher administrative costs.
• For emerging offshore centres in SSA, such as the Seychelles and Mauritius, the effectiveness of cell captives depends on a sophisticated regulatory framework and the ability to compete with established global domiciles, as many SSA countries currently restrict cross-border risk coverage.
• Regulatory frameworks for cell captives must address critical elements including the legal method of asset separation, minimum capital requirements (such as South Africa's ZAR 1 million requirement for cells), governance to avoid conflicts of interest, and supervisory oversight of market conduct.

APA

Dunn, M., Gray, J., & Hougaard, C. (2019). The potential of the cell captive structure for sub-Saharan Africa. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/FSDA-and-Cenfri_The-potential-of-the-cell-captives-structure-for-sub-Saharan-Africa.pdf

Chicago

Dunn, Matthew, Jeremy Gray, and Christine Hougaard. The potential of the cell captive structure for sub-Saharan Africa. FSD Africa, 2019. https://fsdafrica.org/wp-content/uploads/2025/05/FSDA-and-Cenfri_The-potential-of-the-cell-captives-structure-for-sub-Saharan-Africa.pdf.

Wikipedia

{{cite report |last1=Dunn |first1=Matthew |last2=Gray |first2=Jeremy |last3=Hougaard |first3=Christine |title=The potential of the cell captive structure for sub-Saharan Africa |publisher=FSD Africa |date=August 2019 |url=https://fsdafrica.org/wp-content/uploads/2025/05/FSDA-and-Cenfri_The-potential-of-the-cell-captives-structure-for-sub-Saharan-Africa.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dunn2019potential, author = {Dunn, Matthew and Gray, Jeremy and Hougaard, Christine}, title = {{The potential of the cell captive structure for sub-Saharan Africa}}, institution = {FSD Africa}, year = {2019}, month = aug, url = {https://fsdafrica.org/wp-content/uploads/2025/05/FSDA-and-Cenfri_The-potential-of-the-cell-captives-structure-for-sub-Saharan-Africa.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }