Marine insurance plays critical role in protecting Africa's growing maritime economy

October is Marine Month in South Africa, a period dedicated to raising awareness about the country's marine and coastal environments and the vital benefits of the ocean towards economic development. With a coastline stretching over 4 000 km across two oceans, South Africa's maritime sector plays a significant role in supporting business growth, employment and trade. However, the sector’s exposure to changing weather patterns, mechanical failures and operational disruptions highlights the growing importance of marine and cargo insurance in protecting businesses, investments and livelihoods across the maritime value chain.

The maritime industry supports an extensive network of economic activities, from fishing and cargo transportation to logistics, trade and other services that depend on the movement of goods and people by sea. Disruptions to maritime operations can have far-reaching consequences that can affect not only vessel owners and operators, but also businesses and communities that rely on the sector.

According to the African Private Capital Association (APCA), Africa’s blue economies support approximately 50 million jobs and generate around US$300 billion in commercial activity annually. With more than 90% of the Global South’s trade transported by sea, maritime infrastructure and related services remain critical to economic development.

Global marine insurance premiums reached US$42.6 billion in 2025, while Africa accounted for approximately 2.1%, equivalent to about US$0.9 billion, Tafadza (Tafi) Ziteya, Managing Executive: General Insurance at Hollard International, says, “Insurance has an important role to play in strengthening the sector’s resilience and supporting its long-term sustainability.

“Marine insurance should not simply be viewed as another operating cost. It forms part of the infrastructure that enables maritime businesses to protect their assets, manage risks and continue operating with greater confidence. As the sector grows, there is a need to ensure that insurance solutions remain relevant and accessible to businesses operating across the maritime value chain.”

The interconnected nature of the maritime industry means that financial losses often extend beyond the immediate damage to a vessel or its cargo. For small-scale fishers, for example, the loss of a vessel can disrupt an entire business operation. Without access to adequate cold storage or fuel, delays can result in spoiled catches, lost income and missed opportunities to supply markets.

Ziteya explains, “The maritime vessel doesn’t exist in isolation, it supports an entire ecosystem. So, any of these disruptions can affect fish buyers, traders and communities whose livelihoods depend on fishing activities.

Marine insurance can cover a range of risks. Hull and machinery cover protects vessels and equipment, cargo insurance covers goods in transit, liability cover addresses certain third-party claims, and loss-of-hire cover helps protect income when an insured event prevents a vessel from operating. Specialist cover is also available for risks such as war and piracy.

"The important point is that there is no one-size-fits-all solution. A small fishing operation, cargo owner or commercial vessel operator will have different risks. Businesses therefore need to understand not only what assets they are protecting, but also the income, liabilities and wider activities that could be affected if something goes wrong,” says Ziteya.

Addressing the insurance gap among smaller operators

Ziteya highlights that despite the commercial importance of coastal fisheries and other maritime activities, insurance remains inaccessible to many small-scale operators across African markets.

Limited financial resources, low awareness of insurance benefits and challenges in accessing finance contribute to the protection gap. While financial institutions may require insurance as a condition for financing a workboat, operators who purchase vessels using personal savings may have no similar requirement.

For small and medium-sized enterprises (SMEs), that often operate on narrow margins, insurance may be regarded as an additional expense rather than an essential component of business risk management.

Ziteya says that improving access to insurance requires greater awareness and collaboration between insurers, regulators, industry bodies and other stakeholders.

Improving insurance penetration means addressing affordability, awareness and understanding. Initiatives such as Zambia's National Insurance Week help businesses and communities understand their risks, and how insurance can protect them. Regulatory measures in markets such as Ghana and Kenya also encourage local participation by requiring certain marine cargo insurance to be placed with locally licensed insurers. Together, education and regulation can increase access to cover and strengthen local insurance markets, backed by sound underwriting, reinsurance capacity and effective claims service.

For example, a vessel owner may have insurance against physical damage but lack protection against the loss of income while the vessel is out of operation. In the event of a claim, inadequate insurance could leave the business facing a substantial financial shortfall.

Strengthening risk management and access to specialist expertise

Expanding marine insurance coverage across Africa also requires effective distribution networks and access to specialist marine expertise. Maritime operators need reliable channels through which they can obtain advice, understand their insurance policies and submit claims. Brokers, agents, branch networks and digital platforms all have a role in improving access to these services, particularly in geographically dispersed markets.

He notes that Hollard International combines local market knowledge with specialist capabilities across its wider insurance network to help customers understand their risks, structure and appropriate cover and access support when a claim occurs.

Depending on the nature and complexity of the exposure, underwriting and pricing teams can draw on specialist underwriting, reinsurance, claims and marine loss-adjusting expertise when required.  Climate-related risks are also becoming increasingly important in maritime risk management. Changing weather patterns and severe weather events can interrupt maritime operations, threaten physical assets and affect businesses that depend on the sector.

Ziteya says vessel maintenance, voyage planning, access to reliable weather information and appropriate operating and safety practices all have a role to play in managing marine risk. Access to reliable weather information, navigation systems and communication technology can help vessel operators make informed decisions and reduce their exposure to operational risks.

“We don’t simply expect customers to be prudent without offering support. Risk selection, engaging with clients and providing additional value are all part of the process. Climate change is here to stay, and we can’t continue with business as usual,” says Ziteya.

Protecting the broader maritime value chain

The contribution of the maritime sector extends beyond commercial fishing and shipping. Cargo owners, freight operators and water-based service providers form part of a wider economic network that supports trade, transport and access to essential services.

In areas where road and other transport infrastructure remain inadequate, water transport provides an important means of moving goods and connecting communities to schools, markets and other services.

Protecting these activities requires a broader understanding of the risks facing businesses across the maritime value chain. This creates opportunities for insurers and brokers to identify risk needs among operators whose activities depend on maritime transport, even where they do not directly own or operate vessels.

Ziteya says collaboration will be critical to improving insurance accessibility and strengthening the sector’s resilience.

“Partnerships are critical because no single insurer can address the marine protection gap alone. Governments and regulators have an important role to play through appropriate regulatory frameworks,” he says.

Stronger collaboration between local insurers, international specialists and other industry participants can help improve awareness of insurance, broaden access to appropriate protection and strengthen the support available to smaller operators.

As Africa seeks to unlock the economic potential of its maritime sector, investment in risk management and insurance accessibility will be an important consideration alongside broader infrastructure and industry development.