{"id":4947,"date":"2026-02-09T14:40:10","date_gmt":"2026-02-09T14:40:10","guid":{"rendered":"https:\/\/thenewsroomhub.co.ke\/?p=4947"},"modified":"2026-02-09T14:40:10","modified_gmt":"2026-02-09T14:40:10","slug":"african-insurers-lead-sustainable-finance-with-us52b-climate-linked-investments","status":"publish","type":"post","link":"https:\/\/thenewsroomhub.co.ke\/index.php\/2026\/02\/09\/african-insurers-lead-sustainable-finance-with-us52b-climate-linked-investments\/","title":{"rendered":"African Insurers Lead Sustainable Finance with US$52B Climate-Linked Investments"},"content":{"rendered":"

Afirst-of-its kind report reveals the growing momentum across Africa\u2019s insurance industry to integrate sustainability into its core business practices, with US$52 billion of assets under management (AUM) now linked to environmental, social and governance (ESG) targets.<\/p>\n

The figure, based on a survey of members by the\u00a0Nairobi Declaration on Sustainable Insurance<\/a>\u00a0(NDSI) \u2013 a\u00a0network spanning 275 insurers, reinsurers and ecosystem actors across 38 countries, which is supported by FSD Africa\u00a0\u2013\u00a0is one of the key findings of its\u00a0Current State Report 2025<\/em>.<\/a><\/p>\n

The document\u00a0provides the first comprehensive baseline of sustainable insurance efforts across Africa and reveals tangible progress in areas such as the development of climate-smart and inclusive insurance products as well as stronger ESG governance.<\/p>\n

The report was launched at the\u00a0Africa Sustainable Insurance Summit II<\/a>\u00a0in Cape Town (4-6 February 2026), hosted by the NDSI and the\u00a0South African Insurance Association<\/a>\u00a0 in collaboration with the\u00a0African Insurance Organisation<\/a>, highlighting the summit\u2019s focus on\u00a0turning sustainability commitments into action<\/p>\n

It\u00a0lays out the pressing need to develop and scale insurance solutions for\u00a0climate risk\u00a0and\u00a0disaster response:\u00a0Africa recorded over US $14 billion in natural catastrophe losses in 2022, yet 97% of farmers in Sub-Saharan Africa remain uninsured.<\/p>\n

Key findings from the report<\/h3>\n

In response, African insurers \u2013 including many of NDSI\u2019s members \u2013 are beginning to embed ESG across governance, product development, investment strategy, and operations.<\/p>\n

Key highlights in the report include:<\/p>\n

    \n
  • Over half (53%) of NDSI members have begun integrating ESG considerations into investment decision-making and\u00a055%\u00a0into product development including through pricing strategies<\/li>\n
  • An\u00a0estimated\u00a0USD 1.2 billion\u00a0in insurance portfolios is now allocated to environmental risks across NDSI members<\/li>\n
  • USD 2.9 billion\u00a0is targeted at low-income\u2011 and vulnerable populations<\/li>\n
  • Flagship examples include\u00a0East Africa\u2019s first flood insurance product launched by Britam in Tana River County, Kenya and Zep-Re\u2019s\u00a0climate-smart livestock insurance which bundles reinsurance with financial services for pastoralists in the Horn of Africa. Microinsurance for informal workers is also being rolled out by multiple insurers.<\/li>\n<\/ul>\n

    Challenges and opportunities<\/h2>\n

    However, the report also makes clear that there is much more to do:<\/p>\n

      \n
    • ESG-linked assets\u00a0represent just over\u00a015% of the total US $342 billion in AUM\u00a0across NDSI surveyed members.<\/li>\n
    • 45% of NDSI members\u00a0surveyed still do not consider ESG factors, signalling a major opportunity to scale inclusive, climate-smart product lines.<\/li>\n
    • ESG-linked underwriting represents just\u00a06.4% of portfolios\u00a0on average largely led by reinsurers.<\/li>\n
    • Only\u00a05.6% of portfolios\u00a0target vulnerable groups such as low-income households<\/li>\n
    • Just\u00a04% of NDSI\u2019s membership\u00a0have embedded ESG into their boards\u2019 decision-making while almost half (48%) have trained fewer than 5 staff in sustainability.<\/li>\n<\/ul>\n

      Fragmentation and regulatory framework inconsistencies are also major challenges, with Francophone and Lusophone markets underrepresented in conversations.<\/p>\n

      Building on the findings of the report, the summit will focus on embedding\u00a0ESG principles into the core business of Africa\u2019s risk managers and building a community of practice across the insurance sector.<\/p>\n

      Highlights include the launch of the\u00a0NDSI Academy, a hybrid training platform offering hands-on training to help embed sustainability into everyday decisions \u2013 from underwriting and product development, to investment, and regulation.<\/p>\n

      Building a sustainable future<\/h2>\n

      Philip Lopokoiyit, Chair Nairobi Declaration on Sustainable Insurance:<\/p>\n

      \u201cThe theme of the 2026 Summit,\u00a0Powering pledge into practice: integration of sustainability in African insurance<\/em>, builds directly on the momentum of last year\u2019s discussions and actions. 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. These efforts are helping to narrow Africa\u2019s protection gap and strengthen resilience in the face of escalating climate and disaster risks.\u201d<\/p>\n

      Kelvin Massingham, Director Adaptation and Resilience, FSD Africa:<\/p>\n

      \u201cNDSI has grown from a small group of ten early\u00a0insurance\u00a0leaders into a powerful continental movement, but its success is not measured by membership alone. It is measured by action\u2014by 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.\u201d<\/p>\n

      Viviene Pearson, CEO South African Insurance Association (SAIA):<\/p>\n

      \u201cThe non-life insurance industry plays a vital and evolving role in safeguarding economies, enabling development and strengthening societal resilience. In recent years, this role has expanded far beyond traditional risk transfer. Insurance now sits at the intersection of climate change, infrastructure development, economic stability and social inclusion, making it a critical lever in addressing some of the most pressing challenges facing the African continent.\u201d<\/p>\n

      Jonathan Dixon, IAIS Secretary General:<\/p>\n

      \u201cSustainable insurance is fundamental to building societal resilience, particularly in Africa where challenges are significant.\u00a0 Effective supervision is essential for enabling insurance markets to deliver meaningful value, empowering individuals, businesses, and governments to recover, rebuild, and thrive in the face of uncertainty. The IAIS is committed to supporting its members in closing protection gaps, advancing financial inclusion, and addressing climate-related risks, ensuring that insurance not only provides protection but also fosters inclusive and sustainable global growth. Advancing sustainable insurance practices requires a concentrated, multistakeholder approach, one that brings together the public and private sectors, supervisors, governments, industry, and communities.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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