Climate risk is a financial and developmental risk for insurers and governments alike and requires concerted effort in building resilience since it directly influences fiscal policy, national budgets and the stability of financial systems.
This was the key takeaway as government officials, regulators and insurance professionals from West Africa and across the continent gathered in Lagos, Nigeria, recently for the West African Insurance Companies Association (WAICA) 2025 Education Conference under the theme: “The West African Insurer in the Face of Climate Change” to evaluate the impact of climate change on the sector.
In her keynote address, Doris Uzoka-Anite, minister of state for finance, Nigeria, described the gathering of insurance professionals, regulators and policymakers as a defining moment as climate change increasingly shapes the destiny of economies.
She added that the theme highlighted a critical truth: climate risk is now a financial and developmental risk for insurers and governments alike, as it directly influences fiscal policy, national budgets and the stability of our financial systems.
“This reality makes climate risk a macro-economic concern requiring proactive financial planning. Insurance therefore becomes indispensable—a mechanism to share and absorb shocks that governments alone cannot shoulder.”
She said the Nigerian government recognises insurance as a pillar of the nation’s financial architecture—alongside banking, capital market and pensions, while the recently enacted Nigerian Insurance Industry Reform Act (NIIRA 2025) represents a bold step towards modernisation.
“The Act strengthens the capital base of insurers, enhances consumer protection, expands compulsory insurance to critical sectors such as agriculture and infrastructure and integrates insurance into public-private partnerships for climate resilience. Beyond reform, NIIRA 2025 signals Nigeria’s determination to build a credible, transparent and inclusive insurance industry aligned with national economic diversification goals,” said Uzoka-Anite.
Climate-related disasters
The minister warned that governments in the West African sub-region must treat climate change not only as an environmental challenge but also as a financial imperative as Africa already loses billions annually to climate-related disasters at a time that traditional budgets can no longer cope.
“Hence, Nigeria is advancing frameworks that combine sovereign risk insurance, regional disaster-risk pools and public-private climate-finance mechanisms to ensure rapid response and fiscal stability. These tools strengthen preparedness and prevent disruptions to essential development programmes.”
She insisted that no nation can confront the threat of climate change alone as the same storms that affect Nigeria also affect Ghana, Sierra Leone, Liberia and The Gambia.
Uzoka-Anite said since climate change risks are cross-border in nature, the solutions, too, must be collective. She said through WAICA, the nations can:
- Develop regional risk-pooling and reinsurance platforms.
- Exchange data and expertise on climate modelling and disaster forecasting.
- Build professional capacity for innovative, sustainable insurance products.
“Such co-operation will transform insurance from a business venture into a development enabler for agriculture, trade and small enterprises,” she said.
Collaborative efforts
Uzoka-Anite added that insurance will achieve its true impact only when it reaches everyone—farmers, market women, artisans and micro-entrepreneurs through promotion of micro-insurance, digital channels and parametric products that pay out claims instantly based on verified data.
“The Nigerian government remains steadfast in building a strong, competitive and sustainable insurance sector by ensuring effective co-ordination among ministries, regulators and financial institutions, aligning fiscal and insurance policies and forging global partnerships to enhance our climate-response capacity.
“A resilient insurance sector underpins a resilient economy — one capable of absorbing shocks and sustaining growth. Through sound governance, strong regulation and regional collaboration, we can make insurance a cornerstone of West Africa’s sustainable development story.”
Segun Omosehin, commissioner for insurance and CEO, National Insurance Commission (NAICOM), described the theme as a call to courage, innovation and solidarity as climate change is rewriting the narrative of the region and testing the strength of regional economies.
“The evidence is sobering. In 2024, flooding affected over 7.5 million people across 16 West African countries. Nigeria alone accounted for 1.3 million displaced persons. In 2025, over 33,000 Nigerians were displaced, 3,800 homes destroyed, and 5,300 hectares of farmland submerged—threatening food security and economic stability,” said Omosehin.
“These are not just statistics—they are stories of disruption, loss and delayed development. Yet, within this crisis lies an opportunity: to redefine the role of insurance as a force for resilience and sustainable development.”
The NAICOM boss said Nigeria, like many African nations, faces a significant climate finance gap as traditional budgetary responses are no longer sufficient, thereby creating the need to strengthen financial instruments to tackle the menace.
“When integrated into national planning, insurance becomes one of the most effective tools for climate risk management and economic resilience.”
He urged WAICA member states—insurers, reinsurers and industry leaders to:
- Innovate boldly, developing parametric and microinsurance products tailored to the region’s climate realities.
- Invest in data and technology to improve climate modelling, risk assessment and product delivery.
- Collaborate across borders, pooling risks and resources to build regional resilience.
- Expand inclusion, ensuring insurance reaches farmers, market women, artisans and micro-entrepreneurs—the backbone of economies.
- Prioritise capacity building, investing in the next generation of insurance professionals.
“Insurance must evolve from a transactional service to a strategic enabler of development. As a regulator, NAICOM is committed to enabling policies that foster collaboration between operators, regulators and development partners. Strengthening climate resilience across West Africa demands a unified approach—one that blends sound regulation, market innovation and strategic partnerships,” he said.
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[…] Industry Reform Act (NIIRA 2025) signals a turning point. Finance Minister, Doris Uzoka-Anite told insurers that this law “strengthens capital, expands compulsory insurance to sectors such as […]