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Delivering financial inclusion is a core principle of the Sustainable Development Goals (SDGs) given its role in eradicating poverty. Africa is particularly impacted, given that half of the population is without access to formal financial services. Access to bank accounts hovers at 40%, while insurance accounts for just 3% of GDP, against a global average of 7%. However, recent technological developments have led to the financial system becoming more accessible, to low-income populations than ever before. Across Sub-Saharan Africa, for example, the growth of mobile penetration rates has risen to over 43%, providing a crucial platform for the digital expansion of financial services.

Around the world, countries are transitioning their insurance markets to more risk-based capital (RBC) regimes to ensure that insurers have sound financial positions and hold adequate levels of capital. This, in turn, enables the insurance sector to withstand shocks, continue to operate and pay policyholders’ claims. The Global Financial Crisis taught us this lesson; the Covid-19 pandemic is a harsh reminder.

This is a reflective time for the A2ii team. Around this time of the year, we gather to look ahead to our next year’s work plan. We discuss supervisory needs, policy developments and innovations around the world. This year, however, discussions have been anything but ordinary. We have been confronted with the challenge of framing the planning for 2021 in light of the global pandemic and considering different playout scenarios.

To overcome the social distance in online workshops is hard, even with the right preconditions, such as engaging content and participants who are mostly well-adjusted to using digital tools. As Covid-19 brought the world to a standstill, we chose to reformat our Inclusive Insurance Innovation Lab (iii-lab) - initially envisaged as an 18-months programme of six in-person workshops – into a fully virtual programme and to make it work.

To flatten the curve of Covid-19 and save lives, countries have widely accepted social distancing, setting off the slowdown of economic activity worldwide. Where remote work is not an option, reduced contact measures mean reduced earnings. For populations of low-and-middle-income countries, the cost of social distancing is proving higher than for those in developed countries.