African leaders push digital shift, regulatory overhaul to unlock

By Henry Uche

African insurance leaders have called for urgent regulatory reforms and deeper digital innovation to unlock the continent’s estimated $68 billion insurance premium pool and expand financial protection across underserved markets.

Speaking at the 52nd African Insurance Organisation (AIO) Conference, industry stakeholders said Africa’s low insurance penetration should be viewed as a major growth opportunity rather than a structural weakness.

The Commissioner for Insurance and Chief Executive of Nigeria’s National Insurance Commission (NAICOM), Olusegun Ayo Omosehin, said the real challenge lies not in demand, but in access and distribution.

“Despite the recorded gap in Africa’s insurance penetration, the continent already commands an estimated $68 billion premium pool, signalling strong underlying demand where access exists,” Omosehin said.

“The gap is not about willingness to pay—it is about our ability to design and distribute products that reach people where they are,” he added.

Panelists at the conference said traditional agent-based models were failing to serve up to 90 per cent of Africa’s potential insurance market, particularly in rural and informal sectors, describing distribution failure as the sector’s biggest constraint rather than lack of demand.

They advocated a shift toward mobile-first platforms, embedded insurance products, community-based channels and stronger digital infrastructure to widen access and improve claims processing.

With more than 500 million mobile subscribers and over 350 million mobile money wallets across Africa, participants said the continent already has the infrastructure needed to scale affordable insurance products.

The discussion also stressed the need for regulatory innovation, including a move from rigid rule-based supervision to principles-based frameworks, adoption of risk-based capital systems, and expanded use of regulatory sandboxes to support experimentation.

Nigeria’s Insurance Industry Reform Act (NIIRA) 2025 was highlighted as a forward-looking example aimed at improving flexibility, innovation and proportional oversight.

Omosehin noted that while technologies such as artificial intelligence and blockchain are reshaping the industry, they also introduce new risks that must be managed.

“As a result, consumer protection and trust-building are critical to scaling adoption,” the panel noted. “Innovation and consumer protection are not opposing forces—they are mutually reinforcing.”

The session concluded with a call for coordinated action among regulators, insurers and technology providers to raise insurance penetration to between 3 and 5 per cent within the next five to seven years, expand access to financial protection, and strengthen economic resilience across the continent.

Stakeholders said Africa’s insurance sector is now at a defining moment, where regulatory reform, digital disruption and rising demand converge to unlock significant growth potential.