In 2023, climate-related disasters in Africa caused $14.7 billion in economic losses, with insurance covering only one-fifth of the total. At the same time, annual funding meets only 11% of Africa’s adaptation needs. To help address this issue, the African Climate Foundation (ACF) and Krutham are hosting a discussion at COP29 on how the insurance sector can play a bigger role in supporting climate risk management and adaptation efforts.
This research examines the role of insurance in managing climate risks and building resilience in Kenya, Malawi and South Africa. It highlights challenges such as increasing physical and transition risks, limited funding, weak public-private collaboration and low insurance penetration, especially for vulnerable populations. Despite these barriers, insurance offers potential benefits, including timely financial relief, reduced reliance on emergency aid and incentives for risk reduction. Recommendations include mainstreaming climate resilience, strengthening data systems, leveraging digitalisation, creating innovative financial tools and improving local government capacity to align investments with resilience goals.
This series of reports was prepared by Krutham and commissioned by the African Climate Foundation (ACF). It was authored by Dr Cecilia Schultz (Senior Analyst: Climate Adaptation and Just Transition Financing) with strategic input and expert guidance from Iva Detelinova (Senior Advisor: Adaptation and Resilience Investment Platforms, ACF).
The report also benefitted from external and internal peer reviews as well as insights gathered during a panel discussion hosted by ACF at the South Africa pavilion during COP29 in Baku, Azerbaijan.
Krutham team:
Project director: Peter Attard Montalto
Project manager: Dr Cecilia Schultz
Project analyst: Fezeka Twala, Nxalati Baloyi, Nthombizethu Diko
Project editor: Colin Anthony
Visit the links below to download the reports.
