Lack of insurance in Africa leaves millions vulnerable to climate change, natural disasters

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JOHANNESBURG –  Millions of low-income households and small businesses across Africa still have no insurance, leaving them vulnerable to climate change, natural catastrophes, food insecurity, accidents, illness and untimely death, a report launched on Thursday shows.

The Landscape of Microinsurance in Africa 2018 report launched at an international conference on inclusive insurance in Dhaka, Bangladesh, is based on data collected on the microinsurance activities of 100 insurers in Africa in 2017.

The insurers collectively covered 15 million lives, almost two percent of the estimated 700 million people in the continent’s low-income bracket, and brought in total premiums of US$ 420 million, representing less than one percent of overall insurance premiums in Africa.

“Insurance should play a vital role in lifting millions of people out of poverty,” said Katharine Pulvermacher, executive director of the Microinsurance Network which commissioned the study with the support of the government of Luxembourg, Munich Re Foundation, the Center for the Economic Analysis of Risk at Georgia State University and AXA.

“Insurance can build resilience to crises and disasters, and boost productivity, food security and well-being. But our study shows that only a tiny percentage of insurance business in Africa caters for low-income people and the emerging middle class.”