FSD Africa has unveiled a US$30 million Inclusive Insurtech Investment Fund (3iF), an initiative designed to open the way for more private capital into the continent’s underdeveloped insurance sector and close Africa’s widening protection gap.
Announced at the BimaLab Africa Insurtech Summit held in Nairobi on 26–27 November, the fund targets early-stage insurtech startups focused on expanding access, affordability and awareness of insurance, particularly in climate resilience, health and financial inclusion for underserved populations.
Kelvin Massingham, FSD Africa’s director of adaptation and resilience, said the fund aims to catalyse innovation for the many Africans who remain outside the formal insurance system.
“By investing in the next generation of insurtech pioneers, we are unlocking opportunities to expand access, affordability and resilience,” he said.
What You Should Know
Set to launch in January 2026, 3iF employs a blended-finance model intended to de-risk early-stage investments:
- Junior equity from catalytic investors, anchored by FSD Africa Investments (FSDAi)
- Senior equity from commercial and strategic investors, including regional reinsurer Zep Re
The organisers said the structure is crafted to attract private investors who have historically avoided insurtech in Africa due to long product development cycles, limited data availability and regulatory complexity.
3iF will also create a scale-up pathway for startups emerging from BimaLab, FSD Africa’s accelerator that has supported 135 startups across 28 countries since 2020.
Alongside the fund, FSD Africa and the Insurance Regulatory Authority of Kenya launched a Regulatory Sandbox Eligibility Assessment Toolkit, a continent-wide framework to help regulators evaluate new insurance models and fast-track promising innovations into sandbox testing.
Kenya’s insurance commissioner, Godfrey Kiptum, said the new toolkit will strengthen oversight while enabling innovation.
“Building regulatory readiness for innovation is key,” he said. “This toolkit will be an invaluable resource for regulators across the continent.”
Africa’s Insurtech Moment?
Experts say insurance penetration across Africa remains among the lowest in the world, hindered by weak distribution networks, low consumer trust, products poorly suited to informal workers and smallholder farmers, and limited disposable income.
Insurtechs are beginning to bridge these gaps through microinsurance, climate-linked products and embedded insurance distributed via fintechs, mobility platforms and gig-work ecosystems.
Elias Omondi, principal of innovation for resilience at FSD Africa, said the continent’s insurance challenge is increasingly a question of capital.
“Africa’s protection gap is not just a market failure — it’s a capacity and capital gap,” he said. “By combining technical support with catalytic funding, we help insurtechs de-risk innovation and reach the millions who remain unprotected.”
Since its launch in 2020, BimaLab has become a continental hub for insurance innovation, offering technical assistance, regulatory support, mentorship and investor readiness. The programme has helped catalyse over 150 solutions reaching more than 6 million people.
FSD Africa says some of BimaLab’s alumni are already scaling regionally. Turaco, a Kenya-founded microinsurance startup now operating in Uganda, Nigeria and Ghana, credits the programme with helping refine its operations and expand across markets.
Why This Fund Matters
According to FSD Africa, the need is urgent, as it reports that around 80% of economic losses from natural disasters in 2022 were uninsured, up sharply from 58% the previous year.
As climate shocks intensify and extreme weather events become more frequent, demand for affordable risk protection is outpacing the capacity of traditional insurance markets.
The launch of 3iF marks a significant shift in how development finance institutions approach insurance innovation in Africa. Rather than focusing solely on capacity-building, they are now deploying risk-tolerant capital to crowd in commercial investors, a model widely used in fintech but still rare in insurance.
If successful, experts say the fund could help insurtechs address the structural constraints that have long held the sector back. It could also accelerate the growth of climate-linked microinsurance, an area gaining urgency as droughts, floods and extreme heat increasingly destabilise livelihoods across the continent.
Talking Points
It is impressive that FSD Africa has launched the US$30 million Inclusive Insurtech Investment Fund (3iF), addressing a major barrier many African insurtech startups face, which is lack of early-stage capital.
This fund alone positions FSD Africa as a practical catalyst for real insurance innovation, particularly in climate resilience, health, and financial inclusion for underserved populations.
At Techparley, we see how initiatives like 3iF can accelerate the growth of insurtech across the continent, enabling startups to develop products that reach millions currently excluded from traditional insurance.
The blended-capital structure, combining catalytic investor funding with senior equity from commercial and strategic players is especially notable. It lowers risk for early-stage startups, encourages private investment, and strengthens the continent’s insurtech ecosystem.
However, there’s still room to expand impact. The success of the fund will depend on how effectively startups use the funding to scale solutions, engage regulators, and educate customers about insurance products. Continuous technical support, mentorship, and regulatory guidance will be key.
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