Debt Burden Tops Agenda at AIO 2025 Conference in Ethiopia

The 51st Conference and General Assembly of the African Insurance Organisation (AIO) kicked off in Addis Ababa, Ethiopia, with a bold focus on a pressing continental concern—Africa’s growing debt burden and its impact on the insurance industry.

Under the theme “Balancing the Books: Africa’s Debt Problem – Why Does Country Debt Impact Insurers?”, the five-day event brings together over 1,800 delegates from across the continent and beyond. It is the largest turnout in the AIO’s history and a clear indicator of the importance of the discussions taking place.

Central to the event is the concern that sovereign debt levels across African nations have reached unprecedented levels, posing risks not only to economies but also to the stability and growth of insurance markets. This year’s theme is a departure from previous editions that emphasized growth and innovation, shifting instead to the sobering reality of macroeconomic instability.

Governor of the National Bank of Ethiopia, Mamo Mihretu, delivered the keynote address, setting the tone for the conference. He emphasized that high levels of sovereign debt have far-reaching consequences, particularly for the insurance sector, which depends on a stable economic environment to manage risk effectively and invest capital prudently.

“For insurers, sovereign debt levels are not just abstract figures—they directly affect investment strategies, risk exposure, consumer confidence, and the overall viability of the financial system,” Mihretu stated. He noted that many African countries are currently undergoing complex debt restructuring negotiations supported by international institutions like the IMF and World Bank. While such efforts are crucial, he warned that without international coordination and internal reforms, progress may be limited.

Governor Mihretu also used the platform to highlight Ethiopia’s Homegrown Economic Reform Agenda—a national initiative aimed at stabilizing macroeconomic conditions, boosting productivity, and enhancing private sector growth. A significant part of this plan involves modernizing Ethiopia’s financial and insurance systems, making them more transparent, competitive, and aligned with international standards.

AIO President Patty Karuaihe-Martin echoed these sentiments in her opening remarks. She called for a collective effort by African governments, regulators, and private sector stakeholders to address the mounting debt challenge. Quoting figures from the World Trade Organization, she warned that Africa’s external debt is rising at an alarming rate, with some countries spending more on debt servicing than on essential services like healthcare and education.

“Mounting debt limits national capacity to invest in infrastructure, human capital, and climate resilience—all areas where insurers have a stake,” she said. “It also increases economic uncertainty, which is bad for long-term investment and policy uptake.” She argued that the international financial system, with its high interest rates and strict conditions for African countries, needs urgent reform to ensure equitable access to finance.

A major highlight of the conference is a series of panel discussions delving into how national debt affects currency devaluation, investment confidence, reinsurance rates, and the adoption of emerging insurance models. Key sessions include:

• “Africa’s Debt Burden: Not a Pretty Picture”, which analyzes the root causes of the debt crisis.
• “Currency Devaluation and the African (Re)Insurance Industry”, focusing on how exchange rate volatility impacts underwriting and claims.
• “Uniting Africa into One Market”, exploring the potential of AfCFTA to mitigate economic stress by boosting intra-African trade.
• “ESG in a Debt-Ridden Continent”, which questions whether insurers can meet environmental and social goals while governments face repayment pressures.

The AIO is also using the conference to announce key initiatives aimed at reinforcing the insurance sector’s resilience. Among them is the launch of the African Insurance Data Repository, a central hub for real-time industry data that will aid decision-making and risk management across markets. Other notable projects include:

• The Chartered Insurance and Certification Program to train future industry leaders in innovation and financial inclusion.
• A pan-African mortality table to support more accurate pricing in the life and health insurance segments.
• A regional agricultural insurance partnership with the World Bank to help countries better respond to climate-related shocks.
• The expansion of actuarial training programs to address the chronic shortage of skilled professionals in the industry.

Delegates at the conference include regulators, insurance and reinsurance executives, government officials, actuaries, and fintech innovators. The AIO has also opened up sessions for dialogue with central banks and finance ministries, recognizing the importance of cross-sector collaboration in addressing systemic economic risks.

The 2025 AIO Conference stands as a pivotal moment for Africa’s insurance sector. Faced with a challenging macroeconomic environment, industry leaders are being called upon to not only navigate the risks of national debt but also contribute to solutions. There is a shared understanding that insurance must evolve—not only as a business but also as a tool for economic resilience and development.

As the event continues throughout the week, expectations are high that concrete strategies will emerge to help insurers thrive despite the debt constraints faced by many African countries. With deeper integration under AfCFTA, greater data transparency, and a new wave of skilled professionals, stakeholders hope to reposition the industry as a stabilizing force on a continent grappling with economic uncertainty.