15th International Conference on Inclusive Insurance - Coping with Climate Risk

Thursday, November 21, 2019

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580 delegates from 42 countries packed the official opening ceremony of the 15th International Conference on Inclusive Insurance in Dhaka, the theme of which was Coping with Climate Risk. They were welcomed by the Honourable Prime Minister of Bangladesh Sheikh Hasina.Everyone needs insurance, rich or poor,” she said, whilst reminding them that Bangladesh is the seventh most vulnerable country in the world to natural disasters.

In reply, the President of conference hosts the Bangladesh Insurance Association (BIA) Sheikh Kabir Hossain declared that the insurance sector determines the strength of a countrys economy, while Finance Minister Mustafa Kamal assured the audience “the Bangladesh parliament will take all necessary measures to develop the insurance sector.” Asadul Islam, Senior Secretary at the Financial Institutions Division believes that increasing insurance outreach to 35% of the country’s population (over 50 million people) by 2025 is possible, adding that “microinsurance has shown its potential to eradicate poverty and to ensure gender equality.”

Doubell Chamberlain, Chair of the conference co-organisers Microinsurance Network reminded participants that low-income communities face increasingly severe risks. “The ICII is important for convening expertise, probing new ideas, sharing discussions, and gaining new perspectives to find solutions to problems,” he said. Thomas Loster, Chairman of conference co-partners Munich Re Foundation called for closer cooperation: “Governments must engage with the private sector to come up with inclusive insurance solutions.”

The first plenary Making inclusive insurance work for the most vulnerable examined how financial inclusion, including insurance, is pivotal for resilience and sustainability. Insurance protects not only the most vulnerable, but also protects macro-economic gains that have already been achieved. "Climate and disaster risk financing and insurance need to be integrated into comprehensive and holistic strategic frameworks,” said Dr Astrid Zwick of InsuResilience, while Ashok Shah, CEO of APA Insurance added that one of the greatest challenges is raising awareness and financial literacy - as well as building trust. Lack of trust was echoed by Dr Atiur Rahman from the University of Dhaka. “Money is not the problem - lack of trust is, and the insurance industry must gain that trust.”

Day Two opened with a plenary on The challenge of reaching the bottom of the pyramid: distribution, which aimed to find solutions to distribution at scale. Moderated by Microinsurance Master’s Bert Opdebeeck, the three panelists together represented around 85 million enrolments. Lorenzo Chan of Pioneer Insurance said it was essential to design yourself around partners and clients served and that  “shared values are important for successful partnerships to work.” MicroEnsure’s Richard Leftley observed that failing to understand the cost of distribution can lead to the failure of the insurance product. "People trust telcos more than insurance companies because when they top-up, it works!” “You need to think about the whole customer journey, your distribution partner and your needs as insurer,” added Mark Robertson from Hollard Life South Africa.

Participants then had a tricky choice of eight parallel sessions, including Understanding the role of the different stakeholders, hosted by BIA; Small and Medium Enterprises hosted by GIZ; Make change happen – Learn & Act with the ILO's Impact Insurance Facility and FSD Africa; and Gender-inclusiveness in climate risk insurance, hosted by InsuResilience.

Participants barely had time to digest their lunch before day two continued with another round of parallel sessions: Creating awareness for micro-health insurance hosted by BIA; Developing weather index insurance markets with IFC; Agricultural microinsurance in Indonesia with facilitator Dirk Reinhard of Munich Re Foundation; and the Evolution of insurance distribution models hosted by ILO's Impact Insurance Facility and FSDA.

Then it was back into plenary for the final session of the day - The role of policy, regulation and supervision in enabling climate risk solutions, hosted by A2ii. The session highlighted the outcomes of the three consultative forums that the A2ii conducted in Panama, Bangladesh and South Africa, by bring together various partners, regulators and supervisors to discuss their role in enabling climate risk insurance solutions. Teresa Pelanda of A2ii observed that supervisors can catalyse action and act as a bridge to policymakers, industry and consumers to strengthen resilience, while IRDA’s Yegnapriya Bharath touched on the challenges faced by the regulator regarding distribution channels for inclusive insurance and how IRDA have adopted proportionate regulations to address the issue. AXAs Kristian Mangold highlighted the challenges faced in developing and implementing weather-indexed solutions - given they are fairly new products there’s a need for further awareness among regulators about how to integrate them into the regulatory framework.

The final full day of the conference got underway with four parallel sessions looking at post disaster recovery, blockchain, different scales of insurance and crop insurance. The MiN hosted the session on the role of insurance in post disaster recovery, exploring the long term impact of catastrophic events and natural disasters on vulnerable communities. Meanwhile Tech, blockchain, microinsurance, and actuaries were under the spotlight in a session hosted by Microinsurance Centre at Milliman, while the session on Integrating macro, meso and microinsurance schemes was hosted by MCII, showcasing successful examples from the Caribbean and Pacific. The more technically-minded headed for a deep dive into the New paradigm for crop insurance in developing countries hosted by Munich Re.

The final round of parallel sessions started by asking the question: How can insurance build society's capacity to develop? hosted by InsuResilience, Cenfri and the MiN - exploring how insurance can help achieve the Sustainable Development Goals (SDGs). Innovations in health insurance for undeserved customers in Bangladesh discussed new inclusive insurance products and partnerships in the fields of health or hospital cash - but again a lack of understanding about insurance and a lack of trust in products was a major challenge.

Lack of trust was also discussed by participants at the session on New approaches for insurance outreach to agricultural households, hosted by ILO's Impact Insurance Facility. Key takeaways included the need to think locally and work with local people, which have been key drivers of success.

The thorny issue of data - or the lack of it - in measuring impact of insurance was a hot topic during the launch of the Landscape of Microinsurance in Africa: focus on selected countries during the session on Measuring the impact of insurance: Challenges in data collection. The report launch - which is covered in more detail elsewhere in this newsletter - included the premiere of a short video based on the findings. Challenges around collecting data include data infrastructure, lack of regular reporting, varying definitions of microinsurance, unwillingness to share data and inconsistencies. MiN ED Katharine Pulvermacher spoke of the challenges of identifying emerging trends without good data. “When will insurers put people over premiums?” she asked.

And so to the final plenary sessions of the conference, starting with Making innovation more sustainable, hosted by InsuResilience and GIIF and facilitated by Richard Leftley, who kicked off the discussion by asking: “why do many microinsurance pilots fail? Why aren't we reaching the envisaged scale? How can technology be a multiplier for scalable climate risk microinsurance?” Attempting to answer these questions were Rishi Raithatha from Mobile for Development, GIZ’s Dr Jochen Ramcke, MiN Chair Doubell Chamberlain and Vijaysekar Kalavakonda of the IFC, who said farmers in Bangladesh are reluctant to buy microinsurance because it is a less tangible product than credit. On the other hand, purely government subsidised schemes don’t work either - the World Bank is focusing on public-private partnerships. Doubell wondered why it is hard for private sector to distribute weather products. “Weather insurance hasnt taken account of farmers’ conditions and issues,” he said.

To close the conference, Katharine Pulvermacher, Orville Johnson (from next year’s conference hosts the Insurance Association of Jamaica), Astrid Zwick, Sheikh Kabir Hossain and Dirk Reinhard offered their reflections and insights on how to Scale up climate risk insurance going forward. Dirk’s summary included better coordination between governments; cooperation and partnerships; the need for more innovative and brave insurers; financial inclusion strategies at all levels; and disaster risk management approaches including ex-ante financing and insurance. Katherine made a plea for the expansion of inclusive insurance services and rapid response climate risk measures. “Our vision over the next five years is to reach one billion people!” she declared. She stressed the need for stakeholders to work together to raise ambitions and realise the potential of inclusive insurance. “And let us not forget the human touch!” Echoing this theme, Astrid emphasised the importance of looking beyond the numbers and to the impacts of insurance solutions on the poor and vulnerable.

It was left to this year’s host Sheikh Kabir Hossain to thank all participants, speakers and panelists for making the conference a great success, to which Orville Johnson added that he looked forward to welcoming everyone back in Jamaica next year for the 16th International Conference on Inclusive Insurance.