African insurers have reached a major sustainability milestone, with $52 billion in assets now linked to climate action and social inclusion, according to a new continent-wide report launched this week in Cape Town, South Africa.
The 2025 Nairobi Declaration on Sustainable Insurance (NDSI) report provides the first comprehensive baseline of how Africa’s insurance sector is integrating Environmental, Social and Governance (ESG) principles into core business activities—from investment and underwriting to product design and governance.
The figure is based on a survey of NDSI’s membership, a network spanning 275 insurers, reinsurers and ecosystem actors across 38 countries, supported by FSD Africa. The report was unveiled at a summit hosted by NDSI and the South African Insurance Association in collaboration with the African Insurance Organisation, underscoring a sector-wide shift from sustainability pledges toward implementation.
Climate risks expose deep protection gaps
Despite growing momentum, Africa’s insurance protection gap remains stark. The continent recorded more than $14 billion in natural-catastrophe losses in 2022, yet 97 percent of farmers in sub-Saharan Africa remain uninsured, highlighting the urgent need to scale climate-risk and disaster-response solutions.
New climate-smart and inclusive insurance products are beginning to emerge, including flood insurance, livestock cover for pastoralists, and microinsurance for informal workers, though coverage remains limited relative to need.
“Across our membership, we are seeing tangible progress: the development of climate-smart and inclusive insurance products, stronger ESG governance, participation in technical assistance programmes, and deeper collaboration across value chains,” said Philip Lopokoiyit, chair of NDSI.
He added that the efforts are helping to narrow Africa’s protection gap and strengthen resilience in the face of escalating climate and disaster risks.
Capital shifting toward sustainability
African insurers are increasingly embedding ESG across governance, product development, investment strategy and operations.
More than 53 percent of surveyed members have begun integrating ESG into investment decision-making, while 55 percent now incorporate ESG considerations into product development and pricing. Around $1.2 billion of insurance portfolios is allocated to environmental risks, and $2.9 billion targets low-income and vulnerable populations.
Flagship initiatives include East Africa’s first flood insurance product in Kenya’s Tana River County, climate-smart livestock insurance in the Horn of Africa, and expanding microinsurance offerings for informal workers.
According to Kelvin Massingham, director of Adaptation and Resilience at FSD Africa, NDSI has evolved from a small group of early insurance leaders into a continent-wide movement whose success is measured not by membership size but by action.
“It is measured by capital being redirected, products being redesigned, and resilience being built. As this report shows, NDSI is moving the African insurance market from intention to implementation,” he said.
Structural gaps persist
Even so, ESG adoption across Africa’s insurance sector remains uneven.
ESG-linked assets account for just over 15 percent of the $342 billion in total AUM across surveyed members. About 45 percent of insurers still do not consider ESG factors, while ESG-linked underwriting represents only 6.4 percent of portfolios on average—largely driven by reinsurers.
Coverage for vulnerable populations is also limited, with only 5.6 percent of portfolios explicitly targeting low-income households. Governance and skills gaps remain pronounced: just 4 percent of NDSI members have embedded ESG at board level, and nearly half have trained fewer than five staff in sustainability.
Regulatory fragmentation—particularly across Francophone and Lusophone markets—continues to constrain progress.
Jonathan Dixon, secretary general of the International Association of Insurance Supervisors, said sustainable insurance is critical to strengthening societal resilience in Africa, where risks are high and protection gaps remain wide. Effective supervision, he noted, is essential to enabling insurance markets to help economies recover, rebuild and grow amid rising uncertainty.
