Eastern and southern Africa are entering a critical period for insurance, reinsurance and enterprise risk management. The region has a significant chance to sell more policies and establish a risk-financing architecture that can safeguard households, businesses, infrastructure, trade corridors and governments from interconnected shocks. According to recent data, Africa generated approximately $63.6 billion in insurance premiums in 2023.
The African insurance market, however, represents only about 0.9 percent of the global insurance market. A mere five countries – South Africa, Morocco, Egypt, Kenya and Nigeria – accounted for around 87 percent of African premiums, highlighting the extreme concentration of insurance capacity. In East Africa, the 2025 regional outlook indicates that aggregate insurance penetration across Kenya, Tanzania, Uganda and Ethiopia stood at only 1.57 percent in 2023.
The low insurance penetration in East Africa reveals a considerable protection and risk-transfer market that remains commercially underdeveloped. Specifically, Kenya had a penetration rate of 2.61 percent, Tanzania 0.60 percent, Uganda 0.83 percent and Ethiopia 0.30 percent. This situation presents a substantial opportunity for growth in the insurance sector.
Several factors contribute to the underdevelopment of the insurance market in Africa. One major issue is underinsurance, where individuals and businesses frequently carry risks that are either uninsured or inadequately insured. Another challenge is fragmentation, with different jurisdictions applying varying licensing, capital, policy-wording, tax, claims, data and reinsurance requirements.
Inadequate risk information also hampers the development of the insurance market. Without credible datasets on catastrophe, agricultural, mortality, claims, property and commercial risks, insurers must price uncertainty rather than risk. Furthermore, the weakness of enterprise risk management is a significant obstacle, with 32 percent of African firms surveyed in 2023 citing limited access to financial tools as a major challenge.
To address these challenges, Africa regulators, insurers, reinsurers, banks, intermediaries, investors and commercial diplomats should prioritize five key reforms. These include building interoperable regional insurance markets, establishing regional risk-data infrastructure and creating portable cross-border insurance solutions. Strengthening public-private risk financing is also crucial, as demonstrated by the World Bank’s REPAIR programme for Eastern and Southern Africa.
The World Bank’s REPAIR programme aims to mobilize $395 million of additional private capital, alongside $400 million of programme financing, ultimately targeting financial resilience for approximately 28 million people. By implementing these reforms, Eastern and Southern Africa can transition from reactive loss financing to proactive risk financing, making insurance and reinsurance infrastructure for trade, investment and economic resilience.
Key points
- Africa generated approximately $63.6 billion in insurance premiums in 2023.
- The African insurance market represents only about 0.9 percent of the global insurance market.
- The World Bank’s REPAIR programme aims to mobilize $395 million of additional private capital for financial resilience.
