Without better data systems, shared standards and analytical capabilities to turn information into insights, insurers will be unable to accurately price risk, leaving households and businesses across the continent exposed to shocks that could erode years of development gains, the African Insurance Organization (AIO) said.
This is according to AIO’s annual flagship publication Africa Insurance Pulse 2026, produced by Faber Consulting, which examines how data-driven insurance can drive inclusive growth across Africa.
The report argues that Africa’s insurance protection gap is not just a capital gap; it is also a data gap.
AIO secretary-general Jean Baptiste Ntukamazina explained that this prevents businesses from entering underserved communities or expanding their business models.
Ntukamazina added: “Closing this gap is as much an institutional task as it is a technical one, requiring investment, governance and real collaboration between the public and private sectors.
“The stakes go far beyond the industry itself: data-driven insurance is part of the economic infrastructure that can increase resilience and enable inclusive growth.”
The report provides an example of the scarcity of data, noting that non-life insurance penetration – which indicates how extensively insurance transfers risk within an economy – remains well below global benchmarks across the continent.
Even the most advanced market, South Africa, accounts for only 2.3% of GDP, compared with the global average of 4%, and low-income markets lack the data systems needed to expand risk protection and attract investment.
Without reliable, granular data, actuarial models become uncertain, technology pricing requires high margins of safety, and reinsurance costs rise, making protection inaccessible or unaffordable for those who need it most, AIO said.
The report continues, “From the industry’s own perspective, the gap between industry needs and what exists is significant. Organizations rely primarily on their own proprietary data and public regulatory sources for external comparisons, while access to and adoption of alternative and third-party data, which can significantly improve risk insights, remains limited.”
“The impact on market development is measurable and mutually reinforcing. For the insurance market, mispricing was the most frequently cited impact, followed by reduced willingness to underwrite, difficulties accessing reinsurance and capital markets and increasingly restrictive terms.
“For the reinsurance market in particular, the data gap forces higher rates, tighter conditions and higher attachment points, effectively denying African insurers access to effective risk transfer solutions.”
Elsewhere in the report, the AIO noted that a “critical and underappreciated” aspect of this challenge is the role of mobile money.
The article continues: “In low-income countries in Africa, penetration of the mobile financial ecosystem has far exceeded that of traditional banking, approaching half of the adult population in several markets. This digital infrastructure has quietly created data assets with huge potential for the insurance market.
“Insurance growth in Africa depends on integrating into these mobile-led ecosystems, rather than waiting for traditional banking models to mature. Where this integration has occurred, previously uninsurable populations have been reached at scale, suggesting that the protection gap is largely a data infrastructure gap.”
The findings of Africa Insurance Pulse 2026 are based on a structured survey of insurance companies, reinsurers and brokers operating in Africa between March and April 2026.
