Scaling inclusive insurance in Africa and Asia

Scaling inclusive insurance in Africa and Asia

In a recent interview with Pedro Pinheiro, the coordinator of the Insurance Development Forum (IDF) Inclusive Insurance Working Group, we gained insights into a new joint initiative to scale inclusive insurance in Africa and Asia. The IDF is a public/private partnership led by the insurance industry and supported by international organizations. The IDF was first announced at the United Nations Conference of the Parties (COP21) Paris Climate summit in 2015 and was officially launched by leaders of the United Nations, the World Bank and the insurance industry in 2016. The new phase follows an initial phase launched in Kenya to map out inclusive insurance initiatives. The new phase expands to cover Kenya, Senegal and the Philippines, where initiatives will highlight required changes in regulation as well as partnerships to be built in order to scale inclusive insurance.

GIIF: Which countries have been selected for the next phase of scaling inclusive insurance in Africa and Asia?

Pedro Pinheiro: We are pleased to be receiving the support of IFC’s GIIF, which will allow us to follow up on the in-country engagement we launched in Kenya in September last year with our inception workshop, as well as to kick off the work in two new countries: Senegal and the Philippines. This work will end this July. The three countries are among the 21 focus countries of the IDF Inclusive Insurance Working Group, which were selected based on a funnel approach that took into consideration political will and stability, legal and regulatory environment, development of the insurance market, among other criteria, ensuring diversity in terms of regions and members’ presence. We have already started to engage with players in the inclusive insurance space in all those countries, and we are looking forward to replicating the blueprint we created in Kenya, which proved to be successful in producing a relevant roadmap to address the main challenges for the uptake of inclusive insurance in the country.

GIIF: What pillars will form this phase of the planned scaling of inclusive insurance in Africa and Asia?

Pedro Pinheiro: The first step in each of the countries is to convene relevant stakeholders that are committed to developing inclusive insurance solutions. These include national stakeholders as well as international organisations with a local footprint. The initial workshop provides the opportunity to identify specific parties, projects already underway, and barriers to reaching scale. It also serves to identify a core set of individuals from relevant entities who will be willing to invest the time needed to drive a country task force.

In parallel to developing the country gap analysis and roadmap of activities, the Inclusive Insurance Working Group also seeks to identify the resources needed to implement the identified activities and the specific donor appetite for financing them. In this way, the Inclusive Insurance Working Group effectively sets up an “inclusive insurance marketplace” that matches projects to financing sources.

Of course, we recognize that inclusive insurance is not the only risk management tool that is available to help vulnerable populations cope with climate and associated risks. We therefore always take into consideration the overall Crisis and Disaster Risk Finance (CDRF) structure that is in place in the country, including social protection systems, and try as much as possible to tap into the other fronts in which the IDF itself is active. For example, we may consider existing sovereign (macro) insurance schemes and the demand for risk management capabilities that could be provided through the Global Risk Modelling Alliance housed at IDF. Funded by the German government and supported by the international insurance sector, the GRMA offers countries open data, technology and practical learning through co-development of risk management strategies and applied risk finance projects.

GIIF: What can we look forward to and what are your expectations of this initiative?

Pedro Pinheiro: I believe we can look forward to better understanding the specific barriers and constraints that keep these inclusive insurance markets from reaching their full potential, and to stimulating coordinated action between different stakeholder groups to drive the change that is necessary. There will certainly be specific regulatory challenges to be addressed in each country to create a more enabling environment, but we also expect to foster innovation on the supply side, replicating learnings and success factors from other places, as well as facilitating partnerships between national and international stakeholders, to deliver better protection to more people.

Pedro Pinheiro is the coordinator of the Insurance Development Forum (iDF) Inclusive Insurance Working Group, a position housed at the Microinsurance Network – MiN and jointly funded by the iDF and the United Nations Development Programme’s Insurance and Risk Financing Facility.