Insurance sector flags climate change as top risk
Pauline Dikuelo | Monday May 5, 2025 06:30
The firm pointed to the rising frequency and severity of floods and other natural disasters as a growing concern for insurance operations and for policyholders.
In recent months, Botswana has experienced unusually heavy rainfall resulting in widespread flooding that has damaged property, vehicles, and infrastructure across various parts of the country. These events have placed increased pressure on insurers prompting a reassessment of risk models and coverage policies.
Hollard Insure Managing Director Mosimanegape Molefi highlighted the rising frequency and severity of floods as a growing concern for both insurers and policyholders. He said as the industry is increasingly facing complex risks, collaboration, innovation, and a customer-first approach will be critical in shaping a future-ready insurance industry.
“We are actively analysing the data to understand how these weather patterns are impacting not just our clients, but also the sustainability of our offering. “It takes time for all reports to come in but we are committed to responding effectively,” he said.
Molefi emphasised that while the industry is not yet in state of despair, it is certainly no longer in a “business as usual” mode. He stressed the urgent need for climate–responsive insurance products and enhanced collaboration between insurers, government agencies and environmental experts to mitigate future risks.
The shifting climate is not the only challenge facing the sector. Molefi also pointed to cybercrime as a rising threat.
“Cyber used to be seen as a distant issue locally, but due to increasing online interconnectivity, it is now a present risk. Whilst not yet as severe as in developed markets, it is something we must prepare for,” he said.
The industry is also navigating economic pressures with businesses downsizing and reassessing their insurance needs, which has in turn affects insurers’ bottom lines. At the same time, competition in the market continues to intensify with more underwriters and brokers entering the field, a trend Molefi welcomed as healthy for the sector.
Looking ahead, he called on the industry to adopt more accommodative practices including offering flexible payment terms to better meet client needs in a challenging climate. He said the future of insurance is digital, inclusive, proactive, and human-centred.
Molefi said strategic investments are being made into smarter products, deeper customer insights, and platforms that make protection more accessible to Batswana. Emphasis is also being placed on leveraging advanced analytics and Artificial Intelligence to create optimised service experiences whilst a growing focus on sustainability and proactive risk prevention is set to redefine the insurer’s role from simply carrying risk to actively partnering with clients in resilience.
“The landscape is evolving rapidly and so must we, not only to stay competitive but to ensure we continue to offer relevant and resilient insurance solutions,” he said.