Access to Insurance Initiative Newsletter: Issue 1 - 2015 | Happy New Year!

The Secretariat of the Access to Insurance Initiative wishes you a very happy new year!

This newsletter looks back at 2014, shares learnings from the recent A2ii/CGAP/IAIS Specialist Symposium and provides a sneak preview of our workplan for 2015.

- Access to Insurance Initiative Secretariat Team
Visit us at www.a2ii.org

Highlights of 2014

It has been a busy year for supervisors, the Initiative and its partners. The Secretariat closed 2014 with a great sense of accomplishment; amongst others:

• The Initiative celebrated its 5th anniversary! For this occasion the IAIS hosted a Financial Inclusion panel [download conclusions] at its Annual Conference in which and her Majesty Queen Maxima called supervisors to action in a passionate video message for IAIS members [watch video]

• We organised and participated in over 20 events [click here to visit our event page]

• We published 5 Country Diagnostics [click here to access our publications]

• We organised 7 Consultation Calls and connected 297 supervisors (click here to access the Consultation Call notes)

• We organised 2 Consultative Forums together with the IAIS and the Microinsurance Network:  (1) “Challenges and opportunities in enhancing client value in insurance - the African experience with new technologies" In Kigali, Rwanda, (2.) “Mass and micro: Consumer protection challenges in inclusive insurance markets” in Mexico City

• We published 2 Synthesis Notes: (1) “Evolving Microinsurance Business Models and their Regulatory Implications | Cross-country synthesis” and (2) “Regulatory approaches to inclusive insurance market development | Cross-country synthesis”

• We published a Briefing Note on the role of insurance for development: “Inclusive insurance protects households and promotes economic growth”

• We launched a new series of Technical Notes to summarise our key Technical Documents - at the request of the IAIS Financial Inclusion Working Group Chairman:

  • Technical Note 1: “Evolving microinsurance business models and their regulatory implications” [download here]

  • Technical Note 2: “Regulatory approaches to inclusive insurance market development” [download here]

  • Technical Note 3: “Self-assessment and peer review on regulation and supervision supporting inclusive insurance markets” [download here]

  • Technical Note 4: “Training module on regulation and supervision supporting inclusive insurance markets" [download here]

• We disseminated our knowledge and informed supervisors and partners by issuing 8 Newsletters [click here to access A2ii Newsletter archive]

• We translated the Training module on Financial Inclusion into French and we started to develop an online training with the Financial Stability Institute

Capturing lessons for the future

On 2-3 December, the A2ii, CGAP and the IAIS hosted a Specialist Symposium in Washington D.C. titled “Proportional Regulatory Approaches in Inclusive Insurance Markets - Capturing what we Learnt for the Future“. The objective was to carve out future strategies for proportionate, truly enabling regulatory approaches in inclusion. From the discussions, some clear themes emerged.

It is clear that the way in which the market has developed over the past decade, particularly with regards to mass distribution and innovative business models, requires a paradigm shift in the thinking and approach of supervisors. In a number of areas, traditional regulatory constructs and assumptions no longer apply or do not apply in the same way.

For example, the traditional assumption is that the licensed insurer is the strongest party in the insurance value chain. In the mass distribution environment that is often not the case and the aggregator or intermediary such as a retailer or mobile network operator (MNO) has much more market power than the insurer and can extract higher rents for access to the channel. For innovative business models such as index insurance and m-insurance, the scale and complexity of risk is increasing. This is forcing us to rethink what tools supervisors need in order to understand and deal with these risks: a new vision of the expanded role of the supervisor.

A number of further pertinent topics were raised, including how to shift the focus from quantity to quality, the role of the insurance supervisor in state-led insurance schemes, the nuances regarding the approach to formalization, and coordination between supervisors and other regulatory authorities at country level, as well as at global standard-setting body level.

Participants agreed that the IAIS and A2ii should take a leadership role in articulating the changed environment, the opportunities and challenges it presents, the additional guidance required, as well as formulating appropriate responses.

Certainly valuable food for thought as we develop our joint workplan with the IAIS for 2015 and beyond!

We hope that all readers had a restive and festive end-of-year season and we are looking forward to our joint engagements in 2015!

The secretariat team thanks all those who contributed to our work in 2014 and shared their learnings and views through our various activities and events.

A special thanks goes to our Chairman Jonathan Dixon: Deputy executive officer, Insurance at Financial Services Board South Africa; Chair of the IAIS Implementation Committee; and IAIS regional coordinator for the Sub-Saharan Africa Region, who has guided and supported the A2ii with such commitment and dedication once again in 2014.

Another big thanks goes to our funders the German and Dutch Governments: The Federal Ministry for Economic Cooperation and Development (BMZ) and the Directorate-General for International Cooperation (DGIS) of the Ministry of Foreign Affairs of the Netherlands whose contributions are critical to our success.

Thank you to our Governing Council and Executive Committee members (Jonathan Dixon (Chair), FSB, South Africa; Peter Braumüller, FMA, Austria; Peter van den Broeke, IAIS Secretariat; Brigitte Klein, GIZ on behalf of BMZ, Craig Churchill, ILO; Susanne Dorasil, BMZ; Tim Lyman, World Bank/ CGAP; Prega Ramsamy, FinmarkTrust)  for your strategic guidance and oversight

And finally, thank you supervisors for showing us the way and for putting in the time to assist your colleagues in the unchartered territory of financial inclusion. We learned a lot from your questions and presentations.