Asian Insurance Meet kicks off

Kathmandu, June 8

A three-day Asian Insurance Meet 2023 has kicked off in Kathmandu on Thursday.

The event is organised by Nepal Insurance Authority (NIA) and supported by International Association of Insurance Supervisors (IAIS), Asian Development Bank (ADB) and Access to Insurance Initiative (AII).

The conference aims to explore the changing landscape to understand emerging risks, understand the techniques to identify, assess and mitigate emerging risks, develop appropriate strategies and build technical capabilities to minimise impact of emerging risks and facilitate mutual understanding and cooperation, said the NIA.

It is exclusively tailored to insurance supervisors, international and local insurers, reinsurers, brokerage firm and other related sectors most vulnerable to the impact of emerging risks.

On the first day on Thursday, regulators’ meet has been organised where insurance supervisors of the Asian region participated. The remaining two days will be organised as the insurance conference which will focus on the issues of impact of climate change and risks imposed to the insurance sector, moving towards risk-based regimes, developing inclusive insurance, incorporating digital innovation, implementing index-based insurance and discuss on capacity building approaches.

About 500 foreign and Nepali participants from insurance, reinsurance, brokerage as well as other related sectors are expected to attend this conference.

Speaking at the inaugural session of the conference, Chairman of the NIA, Surya Prasad Silwal, said that the emerging risks posed by the rapid pace of technological advancements, climate change, cyber threats and geopolitical shifts have the potential to disrupt not only individual insurance companies but also the entire sector, threatening financial stability and the protection of policyholders.

He stated that the NIA has adopted the strategy of merger and acquisition to streamline the insurance industry and promote fair practices which has resulted in downsizing the number of insurers to 31 from previous 41 insurers. Currently, Nepal has 15 life insurers, 14 non-life insurers and 2 reinsurers companies in operation.

Silwal informed that the authority has also been taking necessary steps for the establishment of Insurance Information Center, Insurance Academy and Insurance Development fund.

"Demand for disaster insurance and/or reinsurance is expected to expand with the focus on prioritizing Disaster Risk Financing in the National Strategic Action Plan for Disaster Risk Reduction, 2017–2030 for the management of residual risk," he said.

Nepal Insurance Authority is moving towards risk based approach to adopt international best practices and build resilience towards the emerging risks in the insurance sector.

Pascale Lamb of Access to Insurance Initiative said that limited and poor availability and quality of data and complexity of risk assessment and capital calculation methodologies are the major challenges of the insurance industry in Asia and the Pacific region.

According to her, balancing regulatory requirements with market dynamics, and capacity constraints in supervisory authorities are the other challenges.

However, she maintained that the digitalisation could offer competitive advantages and greater variety of products to the insurance industry, and improved experience, confidence and financial inclusion in the part of the consumer.

Similarly, Sushil Dev Subedi, Director of NIA, said that while Nepal was planning to implement the Satellite Precision Based Agriculture Insurance resource, capability constraints created hurdles to it.

"We need to develop product with use of index data, use new distribution channel, coordinate with local governments and offer subsidy for index insurance if we want to expand the market of this specialised product," he said.

Arup Chatterjee, Principal Financial Sector Specialist of the ADB, informed that the multilateral donor is looking at pilot projects that would enable the insurers to launch new products in the market.

"ADB is a bank and we are looking at how it is aligned at climate change, gender and transactional opportunities so that we remain engaged for a longer period of time," he said.

Pujan Dhungel Adhikari, Director of NIA, informed that the insurance industry in Nepal has 3.66 per cent contribution to the Gross Domestic Product (GDP) of the country. 

 Published in The Rising Nepal daily on 9 June 2023.