Insurance and the Sustainable Development Goals
Insurance has its origins in a real need – people looking to protect themselves, their families and livelihoods from unforeseen financial shocks. The protection of people and assets is a critical component to more sustainable, resilient and inclusive development.
As the pandemic has demonstrated, unexpected financial shocks can set back development progress. The World Bank estimates that Covid-19 will lead to between 119 and 124 million “new poor” in 2020. Countries with stronger safety nets are, however faring better.
Insurance as a risk protection mechanism plays an important role in nine of the SDGs: No Poverty, Reduced Inequalities, Zero Hunger, Good Health and Well-being, Gender Equality, Decent Work and Economic Growth, Industry Innovation and Infrastructure, Climate Change and Partnerships for Goals.
Insurance plays an indirect and supporting role in five SDGs: Quality Education, Industry, Innovation and Infrastructure, Reduced Inequalities, Partnerships for Goals and Sustainable Cities and Communities.
As one of the world’s largest investors, the insurance sector holds the potential for boosting sustainable development with the 2030 Agenda and the SDGs on the horizon. Its role can be that of an underwriter, as an investor or ‘corporate citizen’.
The A2ii focuses its work around those SDGs where the impact of insurance and the role of insurance supervisors has the most potential.
SDGs and Insurance Supervision
Insurance supervision has an important role to play in sustainable economic development. Through regulatory and policy initiatives, supervisors can ensure that their insurance market offers the necessary range and diversity of products and services that support the development goals in an inclusive way.
Supervisors can also act as conveners of key stakeholders and building partnerships to coordinate insurance solutions, especially when faced with cross-cutting risks such as climate change and pandemic risk.
Translating dialogue to action requires evidence and data
The existing research and the conversations around the role of insurance in achieving the SDGs are largely high-level. For that reason, the A2ii is providing a multistakeholder convening platform to host an honest conversation on the role of insurance in achieving the SDGs.
Seven Supervisory and Public Dialogue events are planned for 2021, in line with the focus theme of the year – the SDGs.
A2ii is also actively developing a list of KPIs to measure the contribution of insurance to nine SDGs. The list draws on insurance supervisory experience and development reports as well as CSR reports of leading global insurers.
As a part of the 'KPI Reporting Project', the policy note 'Insurance and the Sustainable Development Goals - why it matters and how data can help' sets out the key KPIs that can be tracked to capture the link between insurance and the SDGs. The project is a joint initiative of A2ii, Financial Sector Deepening Africa (FSDA), Cenfri and Sub Saharan African insurance supervisors.