FSD Africa insurtech fund aims to close continent’s widening protection gap

Thursday 27th November 2025

by inAfrika Newsroom

FSD Africa insurtech fund plans to channel up to USD 30 million into early-stage startups as the continent grapples with a deep insurance protection gap. The organisation this week launched the Inclusive Insurtech Investment Fund (3iF), a pan-African vehicle targeting firms that use technology to expand access, affordability and awareness.

Insurance penetration remains below 3% in most African markets, leaving households and small businesses exposed when floods, droughts or health shocks hit. In 2022, about 80% of economic losses from natural disasters on the continent went uninsured, up sharply from 58% in 2021.

Moreover, the FSD Africa insurtech fund builds on the BimaLab accelerator, which has already supported more than 135 startups in 28 countries. The new vehicle will provide growth capital to successful graduates and other promising firms, with a focus on climate resilience, health and micro-insurance for informal workers and smallholder farmers.

FSD Africa insurtech fund structure and toolkit

3iF uses a blended finance structure. Junior equity from catalytic investors, anchored by FSD Africa Investments, will sit alongside senior equity from commercial and strategic investors led by Zep Re. The fund is expected to become operational in January 2026 and aims to crowd in further private capital over time.

In addition, FSD Africa unveiled a Regulatory Sandbox Eligibility Assessment Toolkit at the BimaLab Africa Insurtech Summit in Nairobi. The toolkit helps regulators assess the potential impact of new insurtech models, streamline sandbox entry and, consequently, lower barriers for innovators.

Kenya’s Insurance Regulatory Authority and other supervisors across the continent are expected to use the toolkit to support more agile oversight of digital products. Officials say this should, over time, encourage experimentation while protecting consumers.

Why it matters for Africa

Climate shocks, pandemics and economic turbulence have hit African households hard in recent years, yet most still lack even basic insurance. The FSD Africa insurtech fund tackles both capital and regulatory constraints that hold back digital insurers. By backing startups that design low-cost, mobile-based products for farmers, informal workers and small firms, 3iF could help millions manage risk instead of starting from zero after each crisis. If regulators also adopt the new toolkit, they can move faster to approve safe innovation. Together, these shifts could nudge the continent toward a more resilient financial safety net.