African Insurers Link $52 Billion in Assets to ESG Targets, NDSI Report Finds

African insurers have linked an estimated US$52 billion in assets under management to environmental, social and governance (ESG) targets, according to the Current State Report 2025 published by the Nairobi Declaration on Sustainable Insurance (NDSI).

The figure is based on a survey of NDSI members operating across 38 African countries and represents just over 15 percent of the US$342 billion in total assets managed by surveyed insurers and reinsurers. NDSI described the findings as the first comprehensive baseline assessment of sustainable insurance practices across the continent.

 

Investment and Product Integration Shows Early Momentum

 

According to the report, 53 percent of surveyed NDSI members have begun integrating ESG considerations into investment decision-making. A slightly higher 55 percent reported incorporating ESG factors into product development, including through pricing strategies and product design.

However, the report also highlights the scale of the remaining gap. 45 percent of respondents said they do not yet consider ESG factors at all, which the NDSI described as a significant opportunity to expand climate-smart and inclusive insurance solutions across African markets.

 

Read more: Malaysia’s Climate Finance Lab Onboards 30 Projects with RM4 Billion Funding Pipeline

 

Underwriting and Inclusion Remain Limited

 

Despite progress on the investment side, ESG integration within underwriting portfolios remains modest. ESG-linked business accounts for an average of 6.4 percent of underwriting portfolios, a share largely driven by reinsurers. Only 5.6 percent of portfolios were reported to specifically target vulnerable groups such as low-income households.

Within surveyed portfolios, the report estimates that approximately US$1.2 billion has been allocated to environmental risk coverage, while US$2.9 billion is targeted at low-income and vulnerable populations.

 

Governance and Skills Lag Behind Ambition

 

At governance level, ESG integration remains limited. Just 4 percent of NDSI members reported embedding ESG considerations into board-level decision-making. Capacity constraints are also evident, with 48 percent of respondents indicating they have trained fewer than five staff members in sustainability-related topics.

The report suggests that governance and internal capability gaps are now among the key barriers to scaling sustainable insurance practices across the sector.

 

Climate Risk and Protection Gaps Drive Urgency

 

The findings were released at the Africa Sustainable Insurance Summit II, held in Cape Town from 4 to 6 February, and hosted by the NDSI and the South African Insurance Association in collaboration with the African Insurance Organisation.

The report underscores the urgency of action, noting that Africa recorded more than US$14 billion in natural catastrophe losses in 2022, while 97 percent of farmers in sub-Saharan Africa remain uninsured.

Examples cited include a flood insurance product launched by Britam in Kenya’s Tana River County and climate-smart livestock insurance offered by Zep-Re for pastoralists in the Horn of Africa. The report also highlights the rollout of microinsurance products targeting informal workers across multiple markets.

 

Explore OneStop ESG Marketplace: ESG reporting

 

Structural Barriers and Next Phase of Action

 

The report identifies fragmented markets and inconsistent regulatory frameworks as major obstacles to scaling sustainable insurance, while noting that Francophone and Lusophone markets remain underrepresented in sustainability-focused initiatives.

In response, the summit marked the launch of the NDSI Academy, a hybrid training platform designed to support insurers in embedding sustainability across underwriting, investment, product development and regulation.

Philip Lopokoiyit, Chairperson of the NDSI, said the 2026 summit theme, “Powering pledge into practice: integration of sustainability in African insurance,” reflects a shift from commitments toward execution, with progress emerging in climate-smart product design, ESG governance, and collaboration across value chains.

Kelvin Massingham, Director for Adaptation and Resilience at FSD Africa, said the growth of sustainable insurance should be measured not by participation alone but by tangible outcomes, including capital reallocation, redesigned products, and improved resilience.

Jonathan Dixon, Secretary-General of the International Association of Insurance Supervisors, added that sustainable insurance is critical to closing protection gaps, advancing financial inclusion, and managing climate-related risks, particularly in vulnerable regions.