Kigali, Rwanda
East African economies should treat insurance and reinsurance as essential tools for growth, resilience and fiscal stability, according to a new Africa Re white paper presented at the 2026 Africa CEO Forum. The report argues that the region’s governments and insurers need to move beyond viewing insurance as a niche financial product and instead use it to manage climate shocks, support investment and protect development gains.
The paper says East Africa is among the continent’s most promising growth regions, but it is also highly exposed to droughts, floods and other climate-related shocks. That vulnerability is especially costly because insurance penetration remains low across the region, with Kenya leading at 2.25 percent of GDP, followed by Uganda at 0.87 percent, Tanzania at 0.60 percent and Ethiopia at 0.30 percent, according to the East Africa Insurance Outlook Report 2025.
Africa Re says this gap leaves households, businesses and governments to absorb most of the financial damage when disasters strike. The report notes that across Africa more than 90 percent of natural disaster losses remain uninsured, forcing public budgets to shoulder emergency spending and slowing recovery.
Kenya is highlighted as an example of how the region can respond. The paper points to Kenya’s disaster risk financing reforms, including the use of index-based insurance for drought and flood risks, as part of a broader effort to embed risk transfer into public financial management.
The report also points to progress in East Africa’s insurance distribution models. It cites mobile and index-based products that have expanded cover for smallholder farmers in Kenya, Tanzania and Rwanda, and says digital platforms, bancassurance and insurtech are helping insurers reach customers that traditional models have missed.
According to Africa Re, the wider opportunity is to turn insurance into a development asset by mobilizing long-term savings, supporting infrastructure financing and reducing pressure on public finances. It says stronger reinsurance capacity, better regulation and deeper regional integration through the African Continental Free Trade Area could help build a more resilient East African insurance market.
