Intl conference on inclusive insurance kicks in Capital

Kathmandu, Oct. 22

International Conference on Inclusive Insurance (ICII) 2024 has kicked off in the Capital on Tuesday with the aim of deliberating on advancing inclusive insurance solutions for low-income and vulnerable households and micro, small and medium-sized enterprises.

The 20^th edition of the conference, hosted by the Nepal Insurance Authority (NIA), Nepal Insurers' Association, Life Insurance Association Nepal and Nepal Laghu Bimak Sangh, has drawn over 500 participants, including experts from NGOs, development organisations, regulatory bodies, policy experts and insurance industry representatives from 43 countries across the globe.

According to the organisers, the 5-day ICII 2024 features 25 sessions which will focus on the topics like climate risk insurance, digital innovations in micro-insurance, and strategies to overcome barriers to scaling inclusive insurance.

Addressing the inaugural session of the conference, Vice-President of Nepal, Ram Sahay Prasad Yadav, emphasised the importance of inclusive insurance for Nepal.

According to him, inclusive insurance is a crucial step in strengthening the economic and social structure of the country, offering economic security to various members of society, especially the poor and deprived.

Vice-President Yadav stressed the importance of insurance in protecting people from financial adversities and ensuring their financial stability in unexpected situations. "Health and life insurance are particularly emphasised in Nepal to ensure medical facilities and family life security for every individual in society," he said.

He urged the government and insurance companies to work together to ensure that every person, whether in rural or urban areas, has access to insurance.

Vice-President Yadav highlighted Nepal's vulnerability to climate change, with around 80 per cent of the population exposed to climate-related risks. He pointed out the low level of insurance awareness and the significant insurance protection gap, which leaves many citizens vulnerable to growing threats.

Speaking on the occasion, Aroup K. Chatterjee, Principal Financial Sector Specialist to the Asian Development Bank, said that insurance eases the financial burden of the government during the disasters.

"The savings with the insurers can also be mobilised to the development sectors including infrastructure construction," he said.

He informed that protection gap is alarmingly high globally with about 95 per cent of risk exposure uninsured in emerging markets.

According to Chatterjee, in the Asia-Pacific, the risk gap is estimated at 886 billion dollars in premium term. About 280 billion dollars protection is needed against the natural disasters in the region but less than half of it is insured.

Likewise, the threat of climate risk hangs over the protection gaps with the Asia-Pacific likely to suffer the worst economic consequences. "It is threatening industry, machinery and livelihood. We need adaptation and mitigation measures against such threats. Clear understanding of the climate risks and how insurance can contribute to building societal resilience is therefore called for," he said.

Chatterjee said that the insurance industry can help people better tap into insurance and other financial products by focusing on affordability, accessibility, awareness, administration and trust.

The insurance sector must firmly address the protection gap through innovation, technology, partnerships, better regulation, consumer protection, and monitoring and evaluation, he said.  

However, commercial reliability of the projects and personalizing the insurance plans are also important factors. According to Chatterjee, the sector needs to collaborate with the government agencies and create a strong public-private partnership while the regulatory bodies should promote growth and competition while also protecting consumer rights, and maintaining transparency in the market and business. 

Likewise, Surya Prasad Silwal, Chairman of the Nepal Insurance Authority, called for collaborations among the authority, insurers and other concerned agencies from the public and private sector.

"The government has prioritised insurance in its current fiscal policy according importance to it. We are putting our efforts to bridge the protection gap," he said while also stressing the need for raising awareness taking note from the insignificant claim after the last month's natural disasters.

Chunky Chhetry, President of Nepal Insurers' Association, said that the insurance industry in Nepal has to set some parameters to evaluate, monitor and measure the success of the inclusive insurance products and programmes. 

 Published in The Rising Nepal daily on 23 October 2024.