African insurers are increasingly positioning themselves as frontline actors in building resilience against climate shocks, with $52 billion in assets now linked to environmental, social, and governance (ESG) objectives, a new report shows.
The finding underscores the sector’s growing recognition of its role in addressing the continent’s urgent protection and social inclusion challenges.
The 2025 Current State Report of the Nairobi Declaration on Sustainable Insurance (NDSI) – a network spanning 275 insurers, reinsurers, and ecosystem actors across 38 countries; provides the first comprehensive baseline of how Africa’s insurance sector is integrating ESG principles into core operations, including investment, underwriting, product design, and governance.
The report, launched at the Africa Sustainable Insurance Summit II in Cape Town, highlights both progress and persistent gaps as Africa faces increasingly severe climate risks. Natural catastrophes caused economic losses of $14.65 billion in 2022 alone, yet roughly 97 percent of farmers in sub-Saharan Africa remain uninsured. The mismatch between risk exposure and insurance coverage illustrates the scale of the continent’s protection gap, particularly among climate-vulnerable communities.
According to the report, African insurers are beginning to respond by embedding ESG considerations across investment and underwriting portfolios. Over half of NDSI members have started integrating ESG into investment decisions and product development, while approximately $1.2 billion of insurance portfolios is now allocated specifically to environmental risks, and $2.9 billion targets low-income and vulnerable populations.
Flagship initiatives demonstrate this momentum. In Kenya, Britam launched East Africa’s first flood insurance product in Tana River County, offering protection to communities at heightened risk of climate-induced losses. In the Horn of Africa, Zep-Re has introduced climate-smart livestock insurance that combines reinsurance with financial services for pastoralists. Multiple insurers are also rolling out microinsurance products for informal workers, expanding coverage to groups historically excluded from the formal system.
Despite these gains, the report stresses that much more remains to be done. ESG-linked assets account for just over 15 percent of the total $342 billion assets under management across NDSI members, and ESG considerations inform only 6.4 percent of underwriting portfolios on average. Coverage for vulnerable populations, including low-income households, remains minimal, representing just 5.6 percent of portfolios. ESG principles are also largely absent from board-level decision-making, with only 4 percent of member firms embedding sustainability into governance structures, and nearly half of surveyed firms having trained fewer than five staff on ESG issues.
Fragmentation and regulatory inconsistencies across the continent further challenge progress. Francophone and Lusophone markets are underrepresented in ESG discussions, highlighting the need for coordinated, cross-border action.
Speaking at the summit, Philip Lopokoiyit, chair of the NDSI, said: “Across our membership, we are seeing tangible progress: climate-smart and inclusive insurance products, stronger ESG governance, and deeper collaboration across value chains. These efforts are helping to narrow Africa’s protection gap and strengthen resilience in the face of escalating climate and disaster risks.”
Kelvin Massingham, director of adaptation and resilience at FSD Africa, added: “NDSI’s success is measured by action—capital being redirected, products being redesigned, and resilience being built. The African insurance market is moving from intention to implementation.”
Jonathan Dixon, secretary-general of the International Association of Insurance Supervisors (IAIS), highlighted the role of effective supervision in enabling insurance markets to deliver societal value. “Sustainable insurance is fundamental to building resilience, particularly in Africa, where challenges are significant,” he said. “It empowers individuals, businesses, and governments to recover, rebuild, and thrive in the face of uncertainty.”
The summit also saw the launch of the NDSI Academy, a hybrid training platform designed to equip insurers with practical skills to embed ESG in decision-making, from underwriting to investment and regulation.
As climate-related risks intensify across the continent, the report and summit highlight a clear imperative that African insurers must continue to expand ESG-linked portfolios, innovate inclusive products, and embed sustainability into governance if they are to close the continent’s protection gap and deliver meaningful societal impact.
