The Link Between Inclusive Insurance Market, Growth and Poverty Reduction in Africa

Over the last decade, insurance markets in sub-Saharan Africa (SSA) have grown from 4.5 million risks covered to more than 60 million risks covered today. However, according to a report published today by Financial Sector Deepening Africa (FSD Africa) in partnership with the Centre for Financial Regulation & Inclusion (Cenfri), insurance penetration in SSA remains amongst the lowest in the world with life penetration at 0.3% and non-life at 0.5%, limiting its intermediation potential and contribution to inclusive economic growth and poverty reduction.

The report takes stock of the state of insurance markets across a sample of 15 countries in the region (Mauritius, South Africa, Botswana, Ghana, Kenya, Zimbabwe, Nigeria, Zambia, Senegal, Tanzania, Uganda, Rwanda, Mozambique, Angola, Ethiopia). It finds, although there is no universal development path of insurance sectors in SSA, they seem to be progressing, at varying speeds, through four different stages of market development: the establishment and corporate asset stage, the early growth and compulsory insurance stage, the retail expansion stage and the diversified retail stage.

The report highlights that, most countries in the sample are locked into the early growth and compulsory insurance stage of insurance market development due to a number of exogenous and endogenous factors, which serve as barriers to the role of insurance in growth. Exogenous factors include barriers such as low income levels, informalisation of the economy and limited financial sector development, while endogenous barriers include small markets, a shortage of skills and data, and limited distribution infrastructure.

Commenting on the report, Doubell Chamberlain, the Managing Director of Cenfri says: “Insurance contributes to growth and poverty reduction in many ways. Over the last decade, the focus in development circles has been on how insurance, or microinsurance, can support resilience, and encourage productive risk taking behavior, amongst low-income individuals. There has been less of a focus on how insurance markets can support livelihoods of low-income adults through mobilising and intermediating capital for growth. We hope that this report stimulates a new discussion on the role of insurance in supporting economic growth in SSA and invite those interested to follow up with us or FSD Africa.”

Cenfri in partnership with FSD Africa will continue to build on this research and convene stakeholders around the broader approach to insurance market development through a series of workshops and roundtable discussions over the coming months. The first workshop will be hosted in Nairobi, Kenya at the end of March 2017 with the FSD Network to build on the existing work they are doing in insurance market development and how Cenfri and FSD Africa can best support them to achieve their poverty alleviation and growth objectives. If you are part of the FSD Network and interested in attending, please contact the FSD Africa programme Mia Thom at

Click here to download the full report

About Cenfri

The Centre for Financial Regulation & Inclusion (Cenfri) is an independent, not-for-profit think tank, based in Cape Town, South Africa exploring the role of the financial sector and financial services in improving societal outcomes.

Our core focus is on generating insights that can inform policymakers, market players and donors seeking to unlock development outcomes through inclusive financial services and the financial sector more broadly. Cenfri does this by conducting research, providing advice and developing capacity building programmes for regulators, market players and other parties operating in low-income markets across Africa, Asia and Latin America.