The Chief Executive Officer, National Insurance Commission (NAICOM), Mr Sunday Thomas, on Thursday charged insurance regulators across Africa to play their vital role in ensuring sustainable economic development.
Thomas gave the advice at the Declaration on Insurance Conference for African Insurance Industry, organised by the Financial Sector Deepening Africa (FSD Africa), UK Aid in collaboration with NAICOM.
The commissioner said that regulators could guarantee that their insurance jurisdictions offered the essential range and variety of products and services to support the Sustainable Development Goals (SDG’s).
He said that they could do this through regulatory and policy initiatives,
Supervisors, according to him, can also act as conveners of key stakeholders to build partnerships that would coordinate insurance solutions, especially when faced with multifaceted risks such as climate change and pandemic.
Thomas, also the Commissioner for Insurance, said that on the regulatory side, the current environment was increasingly becoming complex.
He said that this heightened the need to ensure effective supervision as well as resolve broader policy challenges such as inclusive economic development, sustainability, climate risk and digitalisation.
The NAICOM boss affirmed that the insurance sector held the potential for enhancing sustainable development with the 2030 Agenda.
“It would appear that the role of insurance has been somewhat relegated within the context of the SDGs.
“This is because the current indicators largely do not capture specific insurance related metrics.
“To better assess the role of insurance and motivate the industry to contribute more to the SDGs, more consistent and disaggregated data collection is recommended,” he said.
According to him, the insurance industry performs a very critical role in promoting economic, social and environmental sustainability and can help countries achieve the UN SDGs.
The commissioner also said that the insurance industry helped to protect society through risk prevention, risk reduction and risk sharing.
He stated that the industry played an important role in nine of the SDGs namely, No Poverty, Reduced Inequalities, Zero Hunger, Good Health and Well-Being.
Others are, Gender Equality , Decent Work and Economic Growth , Industry Innovation and Infrastructure , Climate Change, and Partnerships for Goals.
“The insurance industry also plays an indirect and supporting role in five of the SDGs, namely ; Quality Education, Industry, Innovation and Infrastructure, Reduced Inequalities, and Partnerships for Goals and Sustainable Cities and Communities.”
According to him, ESG issues constitute a shared risk to insurers, businesses, governments and society , as some of the issues such as, climate change, pollution and eco-system degradation, have various ramifications.
The commissioner stated that some of these issues were now considered as likely to be financially material to the success of organisations, hence the compelling need for innovation and collaboration.
“The four principles for Sustainable Insurance formalise the commitment of the signatories to ensuring decision-making along ESG criteria, raising awareness with clients and partners on ESG criteria, collaboration with governments and regulators to promote action on ESG criteria and accountability and transparency of progress in ESG implementation.
“The corresponding list of possible actions provide a common anchor and framework for the insurance industry to manage ESG issues.
“This is expected to enhance the industry’s contribution to building resilient, inclusive and sustainable communities and economies,” the commissioner said.
Thomas appreciated FSD Africa, UK Aid and the United Nations Environmental Programme for the support extended to the industry.
He said the conference was intended to explore ways that insurance could help African countries to achieve the United Nations SDGs.
Thomas stated that such ways include economic growth, social inclusion and environmental protection as well as ensure sustainable development in the African insurance sector.
Discussants on a panel, led by Elias Omondi, Senior Manager, Risk Regulations, FSD Africa, agreed that the challenge of climate change was enormous for one organisation to deal with , hence the need for a coalition of like minds.
They also said that insurers must change business models and build solutions through pocket products that are effective, accessible and affordable through micro insurance, to build a resilient city and community.
The discussants urged stakeholders in the African insurance market at the conference to ensure that the modalities agreed to facilitate the attainment of a sustainable future are domesticated in their Insurance Act.
