The African insurance sector is demonstrably on a path towards greater sustainability, with significant progress being made by key players across the continent, according to the "Current State Report 2025".
The report is published by the Nairobi Declaration on Sustainable Insurance (NDSI), which was launched in April 2021 to represent the bold commitment by Africa’s insurance leaders to address pressing environmental, social, and governance (ESG) challenges.
Across Africa, insurers are beginning to redefine their role—not just as risk carriers, but as enablers of development and guardians of Africa’s future. While the path ahead will require continued innovation, strategic investments, unwavering commitment from industry leaders, and supportive policy environments, the foundation has been laid, the report says. “The momentum is real,” said the report.
African insurers are beginning to integrate ESG across governance, product development, investment strategy, and operations, supported by platforms like the NDSI, which now boasts over 260 signatories across 37 countries. This is also in response to rising regulatory pressure, international frameworks like IFRS and TCFD gaining traction, and investors shifting expectations toward sustainability performance.
Product innovation and climate risk solutions
African insurers are moving from awareness to action through the design of climate-smart, ESG-linked insurance products. From flood and drought cover to index-based microinsurance, these solutions are helping close protection gap. Examples are:
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Britam has pioneered Index-Based Flood Insurance for 300 households in Kenya’s Tana River County. Its livestock and crop insurance products are also scaling across drought-prone counties.
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Old Mutual has partnered with global players to offer parametric insurance to over 10,000 smallholder farmers across Zimbabwe, Mozambique, and Zambia, triggered by satellite rainfall data.
Responsible investment and ESG capital alignment
African insurers are beginning to align capital flows with sustainability goals.
While most ESG investing is still concentrated among large players, a directional shift is visible. Examples are:
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A benchmark estimate of $52bn in ESG-linked AUM is held by NDSI members, led by Prudential, Sanlam and Old Mutual.
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Sanlam reports that 85% of its third-party AUM qualifies as sustainable, with investments in solar, wind, and water infrastructure tracked quarterly.
Despite progress, most African insurers lack publicly disclosed ESG investment strategies. Key gaps include harmonised definitions, regional taxonomies, and data availability.
ESG Governance, strategy, and operations
Sustainability is increasingly being embedded into boardrooms and enterprise risk management—though maturity levels vary. Examples are:
- Sanlam tracks ESG risks quarterly across its enterprise risk management framework and has trained its board and ESG champions to lead implementation.
- ZEP-RE has rolled out board-level ESG training and integrated ESG into underwriting and procurement through its Environmental and Social Management System (ESMS).
Inclusion as a sustainability lever: Reaching the underserved
Many insurers are designing products and partnerships to serve traditionally excluded populations—driving both financial resilience and social equity. Examples are:
- APA, CIC, and Britam are leaders in microinsurance, offering bundled crop, funeral, and health products for low-income households.
- Prudential is developing a Group-wide Inclusive Insurance Framework to ensure product due diligence balances financial and social outcomes.
Inclusion strategies are closely tied to sustainability and ESG performance. Yet, affordability, literacy, and distribution remain key barriers to scale.
Partnerships for scale
a) Regional and ecosystem-level partnerships
Africa’s most ambitious insurance collaborations are scaling protection through pooled risk, public-private partnerships, and ecosystem-wide models. These initiatives demonstrate how regional platforms and technical innovation can unlock climate resilience at scale. They include ARC, a specialised agency of the African Union that helps member states better prepare for, manage, and recover from climate-induced disasters. ARC Ltd, the financial arm of the ARC Group, offers a suite of parametric insurance products and financial tools to provide timely and predictable funding, saving lives and livelihoods before crises escalate.
b) Insurer-led strategic partnerships
Under the World Bank-supported DRIVE project, ZEP-RE is implementing financial services for climate resilience on behalf of the participating countries in the Horn of Africa including Djibouti, Kenya, Somalia and Ethiopia.
This includes the provision of index-based livestock insurance (IBLI) to pastoralist communities in the Horn of Africa, financial inclusion and enhancing savings among pastoralists. ZEP-RE facilitates regional risk pooling, engages local insurers and re-insurers to spread risk, and partners with aggregators (e.g., microfinance institutions, banks, cooperatives) to deliver bundled financial products including insurance and savings.
Britam piloted an index-based flood cover in Tana River County, delivering 48-hour payouts post-El Niño-triggered rains. With NGO and reinsurer support, the product was tailored to vulnerable farming families and is now scaling.
ZEP-RE & the International Finance Corporation design insurance for SMEs to offset climate-related economic shocks, especially in vulnerable regions.
ACRE, a risk management solutions designer, links stakeholders to localised solutions such as insurance and climate change adaptation strategies to reduce agricultural and climate risks.