A2ii Newsletter 11/20
Welcome! In this newsletter, we provide you with updates on the work of the Initiative, events and publications, and experiences and learning on inclusive insurance regulation and supervision across jurisdictions over the past month.
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The A2ii taking precautionary measures related to Covid-19 (coronavirus)
To safeguard the well-being of the A2ii staff and its partners, the A2ii is cancelling or postponing all physical events through spring of next year and exploring the use of virtual formats when possible. Events that are scheduled to take place from May 2021 onwards are currently under review. The A2ii will communicate any changes pertaining to our events on our website, social media channels and through our newsletter.
We have a special page on our website dedicated to tracking worldwide supervisory responses, insurance news and learning resources (such as webinars).
Feel free to share relevant news with us via email@example.com, by tagging Access to Insurance Initiative on LinkedIn or by mentioning us on Twitter.
This year, due to the Covid-19 pandemic, the A2ii and the IAIS have held two exceptional Dialogues webinar series: the series on the coronavirus (Covid-19) pandemic and implications for insurance supervisors (six webinars) and the pandemic risks webinar series (three webinars, two of which were open to all stakeholders).
Recordings of our public Dialogues, presentations and recordings are available on our website under past events and on our YouTube channel.
Summaries of the Dialogues can be found on our blog.
A2ii becomes a supporting institution of the Principles for Sustainable Insurance
The A2ii has become a supporting institution of the Principles for Sustainable Insurance. Part of the United Nations Environment Programme Finance Initiative (UNEP FI), the PSI was launched at the 2012 UN Conference on Sustainable Development to serve as a global framework for the insurance industry to address environmental, social and governance risks and opportunities.
“The Access to Insurance Initiative (A2ii) is pleased to be becoming a supporting institution to the Principles for Sustainable Insurance. As implementation partner of the IAIS, we strengthen the capacity and understanding of insurance supervisors to facilitate the promotion of inclusive and responsible insurance, thereby reducing vulnerability. As our sector continues to grapple with the Covid-19 pandemic and its repercussions, the topic of sustainability is more relevant than ever. Insurance supervisors are important stakeholders in these discussions catalysing other actors in their market and ensuring an enabling environment is in place. The A2ii, through its close work with insurance supervisors, and strengthened relationship with PSI commits to furthering efforts to support a greater contribution of the insurance sector to managing environmental, social and governance risks.”
-Hannah Grant, Head of the Secretariat
A2ii input on responsible insurance to ILO training on Insurance for Development | 30 October
The A2ii moderated the final session on ‘responsible insurance’ during the ILO Impact Insurance Facility’s 5-week on-line training on Insurance for Development. The panel examined the topic of responsible insurance from different perspectives with input from the Kenyan Insurance Authority, the Ghanaian Insurance Association and the Microinsurance Network.
The important role that insurance supervisors play in creating the space for responsible innovation was highlighted through the example of BIMA box and innovation hub in Kenya. It was also interesting to learn about the Insurance Awareness Coordination Group in Ghana which together with Complaints Management and Advice Bureau are key elements of ensuring that consumers get value from their insurance in Ghana.
Based on the results of this year’s Microinsurance Landscape Study, a lively discussion also ensued on claims ratios and what is a ‘responsible’ claims ratio in inclusive insurance.
A2ii-IAIS Dialogue on Formalisation and Licensing Regimes | 22 October
In the month of October, the A2ii and IAIS organised a Dialogue on formalisation and licensing regimes. Supervisors heard from Andrea Camargo (Director of Inspowering and Technical Expert at the A2ii) and experts from Cenfri. The focus of the discussion was on the particular relevance of formalisation and licensing for inclusive insurance, the need to apply a proportionate approach to licensing requirements and existing IAIS guidelines to licensing and formalisation. Participants also heard from Cenfri, who presented their report on the potential of cell captive structures for Sub-Saharan Africa. They highlighted the use cases and benefits of cell captive structures and how they can address formalisation and licensing challenges.
For a detailed overview of what came up during the Dialogue, please view the presentations available on our website here. Keep an eye on our website for the blog summarising the inputs.
The next Supervisory Dialogue will take place on 26 November and we will explore the topic of Supervisory issues related to closing the retirement protection gap. Participants will hear from experts from IOPS who will discuss the pension protection gap particularly in emerging markets, what role supervisors can play to bridge that gap and the short-term and long-term impacts from Covid-19. For more information and to register for the webinar, please visit our website here.
Sub-Saharan Africa Public Dialogue on InsurTech: Catalysing Access to Financial Services following Covid-19 | 15 October
On the 15 October, the A2ii in partnership with the UK’s Department for International Trade (DIT), FSD Africa, the IAIS and the UK-Nigeria Tech Hub, hosted a Sub-Saharan Africa public dialogue on InsurTechs and catalysing access to financial services following Covid-19.
The public dialogue consisted of a range of speakers including innovators and insurance supervisors. The opening session covered early extracts from the Global Covid-19 Fintech Market Rapid Assessment Survey, carried out by the Cambridge Centre for Alternative Finance (CCAF) and the World Bank. The data shared by CCAF indicated the resilience of InsurTechs during the pandemic, but that challenges still lie ahead.
This was followed up with a fireside chat with innovators in the region that highlighted that established incumbents are also embracing innovation as well as start-ups. Both Pula and Prudential Africa participated and reiterated the need for regulators to be flexible in their approach and customise their regulatory environment to the local context.
The final panel session on regulating for innovation highlighted the challenging balance for supervisors who need to embrace innovation whilst not ignoring the risks. As perfectly summarized by Kofi Andoh, Deputy Commissioner for Insurance at the National Insurance Commission in Ghana, “we shouldn’t build walls, but walk side by side with innovators”. A recording of the dialogue will shortly be available on the A2ii website, as well, there will be a joint blog between the A2ii and the UK Department for International Trade.
The significance of pension systems to a countries’ economic stability and the security of their ageing populations is increasingly being recognised. There already exists a pensions protection gap driven by increases in life expectancy, falling birth-rates and a decrease in the working-age population.
This existing protection gap is further exacerbated by challenges such as high inflows of pension beneficiaries, among others. The Covid-19 pandemic has further widened the pensions gap and the extent to which these risks can be absorbed will vary across various pension schemes and systems. Supervisors play a key role in not only ensuring consumer protection, but also providing an enabling environment that will see the growth of robust pension systems.
During this Dialogue, participants will hear from experts from IOPS who will explore the topic of the pension protection gap particularly in emerging markets, what role supervisors can play to bridge that gap and the short term and long-term impact from Covid-19.
This event will be open to supervisors only and will take place on 26 November 2020 at:
10am CET in English (with simultaneous French interpretation)
4pm CET in English (with simultaneous Spanish interpretation).
It will last one hour and will take place via WebEx.
If you have any questions or comments, please send them to firstname.lastname@example.org
Landscape of risk-based capital regimes in emerging markets
by Carolyn Barsulai and Janina Voss, A2ii
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.
To date, much of the literature has focused on a few regimes at the forefront of this development, such as the US Risk-Based Capital system and the EU’s Solvency II. If we take a step back to scan the globe, however, we can see that the transition is happening at different paces in different places. Through our A2ii-IAIS-IAA actuarial skills trainings for insurance supervisors, we had the opportunity to take a close look at risk-based capital regimes in emerging markets, and their variations across Sub-Saharan Africa, the Caribbean and Asia.
On 17 September, the learnings were shared on the A2ii-IAIS Supervisory Dialogue Risk-based capital regimes in emerging markets. In this blog entry, we bring you the takeaways from the dialogue.
Continue reading on our blog...
Manoj brings over 13 years of experience working with insurers, directly with consumers, and stakeholders like insurers, banks, regulatory agencies, DFS providers and multilateral agencies. Before coming to A2ii, Manoj led the inclusive insurance efforts at MicroSave Consulting (MSC) in the Asian and African markets advising insurers and digital finance services providers on addressing the low and moderate-income clients. He has also worked with the Microinsurance Network, SEWA India and has been a fellow with the ILO’s Impact Insurance Facility. Manoj has a bachelor's degree in Accounting and a master's degree in Business Administration.
Knowledge Hub Highlight
Policymakers and supervisors have been recognising the importance of National Financial Inclusion Strategies (NFIS) and Financial Sector Strategies as policy tools for financial inclusion. More recently, the topic of insurance has become an integral part of these strategies. Its integration is particularly relevant as insurance market development supports national policy objectives, promotes financial sector development, builds the resilience of vulnerable households, enterprises and communities, fosters the sustainable growth of households, enterprises and communities, and mobilises funds for investments.
This policy note provides a summary of a stock-taking jointly implemented by the A2ii and the Alliance for Financial Inclusion (AFI), including the main results of a survey and examples from the case study countries: Malaysia, Papua New Guinea, Paraguay and Tanzania.
You can download this paper here (published in English, Spanish and French).
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