African insurtech startups have raised more than $239 million in the last 10 years, according to Tracxn, a global startup data platform.
This reveals the marginal position insurance technology still occupies within Africa’s broader tech ecosystem, trailing far behind sectors such as fintech, e-logistics, agritech, edtech, and cleantech that continue to attract stronger investor attention.
Across the continent, insurance remains one of the least prioritised financial products. Africans worry about money, food, transportation, healthcare, and education, but insurance often ranks low on the list of perceived necessities. In Nigeria, for example, only about 10 percent of citizens have health insurance, the most common form of coverage, according to data from Leadway Insurance.
By contrast, access to financial services is far higher. As of 2023, 64 percent of Nigerians had access to financial services, rising to about 85 percent in Kenya in 2024 and between 84 and 98 percent in South Africa.
For insurtech, the challenge and opportunity are similar. Industry players argue that insurance technology must do the heavy lifting of reshaping perceptions, embedding insurance into daily economic activity, and making coverage accessible, affordable, and relevant.
BusinessDay spoke with three insurtech founders about the state of the industry in 2025 and what lies ahead in 2026.
Chigozirim Israel, CEO, Riwe
What can you say about the insurtech sector in 2025, particularly as it relates to digital financial services and funds raised?
In 2025, Nigeria’s insurtech sector moved from experimentation to early institutionalisation. Growth in the sector was driven by the expansion of digital financial services, rising climate risks, and stronger regulatory engagement. Insurance innovation increasingly ran on fintech rails, with payments, digital lending, agri-finance, and trade platforms becoming primary distribution channels. This accelerated embedded and usage-based insurance models, lowered distribution costs, and improved access for underserved segments.
Regulatory developments were equally important. The Nigerian Insurance Industry Reform Act (NIIRA) 2025 and new insurtech guidelines signalled intent to strengthen data integrity, market discipline, and innovation readiness. Collaboration with bodies like the Nigerian Insurers Association helped bridge traditional insurers and technology players.
Looking at funding, 2025 saw a shift in capital composition. While large venture rounds remained limited, catalytic and blended capital increased. DFIs, donor-backed vehicles, and impact funds supported insurtechs tackling systemic risks such as climate shocks, food security, and SME resilience. This reflected a growing recognition of insurance as foundational infrastructure for financial inclusion and economic stability.
Outlook for 2026
In 2026, embedded insurance will continue to scale across lending, payments, trade, and agricultural value chains. Climate and parametric insurance will move from pilots toward broader deployment, supported by climate intelligence and localised risk data.
Regulatory focus will shift to implementation and compliance maturity, favouring operators with strong governance and consumer protection. Collaboration between insurtechs, insurers, and reinsurers will deepen, with insurtechs acting more as risk and technology partners.
He added that funding will remain disciplined, favouring businesses addressing real economic risks with sustainable models.
Read also: Innovative InsurTech platform goes live to transform insurance access in Nigeria
Jimi Fasina: Co-founder & CEO, Tsaron Tech
What can you say about the insurtech sector in 2025?
In 2025, Nigeria’s insurtech sector moved further into a phase of disciplined and pragmatic growth. While innovation continued, the focus shifted more clearly from experimentation to execution and sustainability.
Despite Nigeria’s insurance penetration remaining below 1 percent, significantly lower than peer markets, insurtechs made incremental progress by embedding insurance into existing digital financial services such as payments, lending, logistics, mobility, and health platforms. This distribution-led approach proved more effective than standalone insurance sales in reaching underserved and informal segments of the economy.
From a funding perspective, 2025 reflected broader venture capital trends across Africa. Capital inflows into insurtech were more selective compared to the peak funding years of 2021–2022. Investors increasingly prioritised fundamentals such as revenue visibility, loss ratios, claims efficiency, and partnerships with licensed insurers. As a result, funding rounds were generally smaller and more strategic, favouring companies with clear paths to profitability and operational resilience.
What key trends or outlook should industry stakeholders watch out for in 2026?
Embedded insurance will remain the dominant growth model, driven by deeper integrations with fintechs, e-commerce, logistics, and mobility platforms. Claims turnaround time and automation will become major competitive differentiators, as faster and more transparent claims processing is critical to rebuilding trust.
Micro and usage-based products tailored to informal income patterns will see stronger adoption. Regulatory engagement is expected to intensify, with greater use of sandboxes, pilot programmes, and stronger consumer protection frameworks.
Morakinyo Animasaun: Co-founder, Wimika RMS Technologies Ltd
What can you say about the insurtech sector in 2025?
In 2025, insurtech had moved beyond disruption narratives into pragmatic maturity. It is no longer positioned as a replacement for insurance but as infrastructure that re-engineers how risk is identified, priced, prevented, and transferred in a digital economy. Retail insurance increasingly became embedded within digital financial services, activating coverage contextually at the point of risk rather than as a separate purchase.
The growth of digital platforms also exposed new risks, particularly cyber, fraud, and platform-dependency risks that traditional models struggle to price. While AI improved underwriting and fraud detection, coverage gaps remained, especially for locally relevant cyber risks.
Funding became more concentrated and disciplined, with investors prioritising governance, regulatory readiness, and sustainable unit economics. AI crossed from experimentation into production-critical deployment, driving efficiencies in underwriting, claims, and customer service.
Regulation was a defining factor. NIIRA 2025 repealed the 2003 framework, raised capital standards, enabled digital certificates, and established a Consumer Protection Fund. NAICOM’s Insurtech Guidelines clarified participation models and compliance expectations, though concerns remain about balancing innovation with regulatory rigidity.
What key trends to watch out for in 2026?
Firstly, prevention will increasingly be bundled into insurance products, particularly for cyber and operational risks. Secondly, agentic AI will become a competitive divider, with leaders operationalising automation safely at scale. Thirdly, automated and parametric insurance models will expand beyond climate into areas such as cyber downtime, logistics delays, and platform outages. Finally, regulatory scrutiny will intensify around algorithmic decision-making, with higher expectations for explainability, accountability, and model governance.
