Africa’s disaster-risk financing gap is putting data, insurance and infrastructure in focus
African countries insure just 3–5% of losses from disasters, compared with about 40% globally, leaving governments to shoulder more than 90% of losses estimated at between USD 7 billion and USD 15 billion annually.
The figures were highlighted at the inaugural CDRFI Africa Forum in Nairobi, where policymakers, regulators and insurance industry players are examining how countries can secure financing for climate and disaster risks before they occur.
The two-day meeting is focused on increasing the insurability of risks across African markets, particularly those affecting critical public infrastructure.
The discussions are being held under the CDRFI Africa Forum, an initiative of ZEP-RE convened with the East Africa Insurance Supervisors Association and hosted by Kenya’s National Treasury.
Kenya’s Principal Secretary for Economic Planning at the National Treasury, Dr Boniface Makokha, said governments need to identify vulnerable assets and determine how their recovery would be financed before a disaster strikes.
“The question is no longer whether disasters will occur, but whether our countries are financially prepared when they do,” he said.
The forum comes as governments across Africa face increasing pressure to finance recovery from climate-related disasters, with many continuing to rely on emergency budgets after major shocks.
ZEP-RE Managing Director and Group CEO Hope Murera said governments should instead put financial mechanisms in place before disasters occur.
“Disasters should not become fiscal crises,” Murera said. “Resilience is not a cost. It is an investment in growth and stability.”
Kenya’s Commissioner of Insurance and CEO of the Insurance Regulatory Authority, Godfrey Kiptum, said closing the protection gap should be treated as a development priority.
He called for insurance regulation that protects policyholders while creating room for innovation, pointing to the impending El Niño event as a reminder of the need for advance preparedness.
Uganda’s Insurance Regulatory Authority Acting CEO and EAISA Interim Chairperson Dr Protazio Sande said the ability to insure infrastructure and other investments is increasingly important to attracting capital.
“If it is not insurable, perhaps it is not investable,” he said.
Insurance Development Forum Secretary General Ekhosuehi Iyahen said the problem goes beyond low insurance penetration, arguing that some risks remain difficult to insure because of weaknesses in data, modelling, market capacity and broader development conditions.
“Prediction has improved faster than protection,” Ms. Iyahen said. “A protection gap is rarely just an insurance gap. It is almost always a development gap.”
The forum also examined how governments can combine different financing mechanisms instead of relying on a single source of funding when disasters occur.
World Bank Group disaster risk finance specialist Emiko Todoroki said countries could combine budget reserves, contingent financing, insurance and investments in risk reduction depending on the level and nature of the risks they face.
Participants also discussed the potential of regional and thematic risk pools to address limited underwriting capacity, particularly for systemic climate risks that can affect several countries or large parts of an economy at the same time.
The meeting follows the 2025 Zanzibar Declaration, in which insurance regulators from 12 countries committed to supporting efforts to protect critical public infrastructure from disaster risks.
Participants are now pushing for those commitments to move from policy declarations to implementation, with better disaster-risk data, stronger modelling capabilities and greater innovation identified as priorities for expanding insurance coverage.
Another emerging proposal discussed at the forum is the use of shock-resilient loans, which could incorporate risk-transfer mechanisms into sovereign lending and provide governments with additional fiscal room after major disasters.
The forum has brought together representatives from 21 countries, alongside development partners and insurance sector stakeholders, including officials from Jamaica and the Philippines who are sharing their experiences in disaster risk financing.
Participants said that the central challenge is to ensure governments have access to funding when disasters strike without forcing them to divert resources from development priorities or accumulate additional fiscal pressure.
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