AIO says Africa’s protection gap is also a data gap

Africa’s insurance protection gap is also a data gap, according to the African Insurance Organisation.

The AIO’s annual “Africa Insurance Pulse 2026” report, prepared by Faber Consulting, examines how data-driven insurance could support inclusive growth across the continent.

The report argues that where risks cannot be reliably measured, insurers cannot price adequately, innovate responsibly or scale sustainably.

It said this leaves households and enterprises exposed to shocks that can erode years of development gains.

Jean Baptiste Ntukamazina, secretary general of the African Insurance Organisation, said stronger data systems were essential for market development.

“Without better data systems, shared standards and the analytical capacity to translate information into insight, insurers cannot price risk accurately, reach the underserved or expand their business model,” Ntukamazina said.

“Closing this gap is both an institutional and technical task, requiring investment, governance and genuine collaboration among public and private sectors.”

He noted that the issue extended beyond the insurance sector.

“The stakes extend well beyond the industry itself: data-driven insurance is part of the economic infrastructure that improves resilience and enables inclusive growth.”

The research identifies data scarcity as a central constraint on African insurance market development.

Non-life insurance penetration remains well below global benchmarks across the continent, with South Africa, the most advanced market, recording 2.3% of GDP against a 4% global average.

The report said lower-income markets often lack the data systems needed to expand risk protection and attract investment.

Without credible and granular data, actuarial modelling becomes uncertain, technical pricing requires higher safety margins and reinsurance costs rise.

The AIO said this can make protection either unavailable or unaffordable for the populations that need it most.

A key part of the report focuses on mobile money.

Across low-income African countries, mobile financial ecosystems have achieved penetration rates far above traditional banking, in some markets reaching close to half of the adult population.

The report said this has created a potentially significant data asset for insurance markets.

It argues that insurance growth in Africa depends on integrating into mobile-led ecosystems rather than waiting for conventional banking models to mature.

The AIO said where this integration has taken place, previously uninsurable populations have been reached at scale.

The report also links insurance data quality to the wider investment role of the sector.

It said insurance can mobilise capital and reduce fiscal risk, but only where data integrity supports confidence in underwriting, solvency reporting and claims management.

Where data ecosystems are weak, perceived systemic risk rises, capital costs increase and insurers’ ability to support infrastructure, agriculture and micro, small and medium-sized enterprise growth is reduced.

The findings are based on a structured survey of insurers, reinsurers and brokers operating in Africa, conducted between March and April 2026.

Every organisation surveyed rated high-quality insurance data as critical to its strategy.

Respondents cited operational necessity, governance requirements and competitive advantage, but also described a market affected by insufficient granularity, processing delays, systematic inaccuracy and non-standardised definitions.

The report said these problems affect pricing, reserving and risk assessment.

Organisations rely on their own proprietary data and public regulatory sources for external comparisons, while the use of alternative and third-party data remains limited.

The consequences for market development are significant, the AIO suggested.

For primary insurance markets, mispricing was the most commonly cited impact, followed by reduced underwriting appetite, more difficult access to reinsurance and capital markets, and increasingly restrictive terms.

For reinsurance markets, the report said data gaps force higher rates, tighter conditions and elevated attachment points, “effectively pricing African insurers out of efficient risk-transfer solutions.”

The full report Africa Insurance Pulse 2026 is available at https://african-insurances.org.