ABSTRACT

This study investigates the impact of climate change indicators on the performance of the insurance sector in Sub-Saharan Africa. Using panel fixed effects regression analysis, we analyse the relationships between precipitation, temperature, humidity, carbon footprint, and insurance penetration rates.

Our findings reveal that precipitation and temperature exert significant influences on insurance penetration rates, with higher rainfall and temperatures associated with increased insurance uptake. However, the relationship between humidity and insurance penetration rates shows mixed evidence, warranting further investigation. Additionally, while carbon footprint displays a non-significant impact on insurance demand, the study underscores the need for deeper exploration of the intersections between climate change mitigation efforts and insurance market dynamics.

Based on our findings, we propose recommendations for enhancing climate resilience in the insurance sector, including strengthened regulatory frameworks, public awareness campaigns, and investments in climate adaptation measures. Ultimately, addressing the challenges posed by climate change requires collaborative efforts from policymakers, insurers, and other stakeholders to build a more resilient insurance sector capable of effectively managing climate risks and promoting sustainable development in Sub-Saharan Africa.