West African insurance companies are facing growing financial pressure as climate change continues to cause widespread economic losses estimated at $50 billion annually. Insurers from across the region recently met in Lagos to discuss how to adapt their business models and protect policyholders from the increasing risks associated with floods, droughts, and rising sea levels.
According to Mediaplusng.com, climate change, once seen as a distant concern, is now a daily challenge across the region. A report by the World Economic Forum (WEF) listed Lagos as one of the top 11 low-lying cities that could disappear by 2100 without urgent climate action. The study warned that rising tides driven by global warming are eroding Lagos’s coastline, putting millions of lives and billions in assets at risk.
By 2025, rainfall continues well into October, leading to severe flooding across Nigeria and neighbouring West African countries. Other threats, such as desertification and erratic weather, make it clear that business as usual is no longer sustainable for economic managers in the region.
The impact of these climate risks is hitting the insurance sector hard. Traditionally focused on risk transfer, insurers are now becoming key players in national resilience. Despite contributing less than four per cent of global greenhouse gas emissions, Africa faces the world’s toughest financial consequences of climate change.
At the 2025 West African Insurance Companies Association (WAICA) Education Conference in Lagos, Zillah Malia, Senior Manager for Climate Finance at FSD Africa, revealed that Africa loses between $30 and $50 billion annually to climate disasters, even though insurance penetration remains below three percent. She noted that 17 out of the 20 countries most threatened by climate change are located in Africa.
Malia described the insurance industry as a “triple enabler”—a risk manager, underwriter, and investor—and emphasized that sustainable insurance is key to leveraging private capital for green development. She added that Africa’s low insurance penetration presents a major growth opportunity, especially with the rising demand for climate risk products and infrastructure coverage.
She urged insurers to mobilize funds toward renewable energy, green infrastructure, and adaptation projects, saying, “Insurers manage trillions in assets that can drive sustainable growth. Investing in adaptation guarantees that our economies can grow while reducing climate risks.”
According to Mediaplusng.com, the conference also featured the former Deputy Minister of Finance, Republic of Sierra Leone, Mr. Bockarie Kalokoh, who warned that the region’s climate challenges are deeply interconnected. From droughts in the Sahel to floods in coastal cities, he explained that a single event can trigger food insecurity, water shortages, energy crises, and even population displacement.
Kalokoh also noted that the global protection gap remains alarming. “As of 2023, only 35 per cent of the $357 billion in losses from natural disasters were insured,” he said. “This leaves a 65 per cent gap—over $234 billion—in uninsured losses.”
He warned that as climate-related hazards increase, insurance companies are facing higher regulatory pressures, escalating costs, and limited coverage. The result, he said, is the rise of ‘insurance deserts’, where coverage becomes either unaffordable or completely unavailable.
For West Africa’s insurance leaders, the message is clear: building climate resilience is not just a policy goal. It is now a business survival strategy.
