The Africa Insurance Organisation (AIO) has called on insurance and reinsurance operators across Africa to promote environmental sustainability in the continent in line with the UN’s principle of sustainable insurance initiative.
AIO President Mr Tope Smart made the call at the ongoing Africa Insurance Organisation’s (AIO) conference in Nairobi, Kenya, with the theme: Insurance and Climate Change: Harnessing the Opportunities for Growth in Africa.
According to Smart, the theme for the conference would not have come at a better time than now when there is an increasing need to address the current global challenges affecting the continent.
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He noted that the AIO was established in 1972 with the objectives of developing a healthy insurance and reinsurance industry and the promoting of inter-African cooperation.
He told the regional insurers that the 2012 UN’s principles of sustainable insurance were dedicated to helping insurers manage sustainability risk while seizing opportunities to move towards a more climate-resilient economy.
He said that the African insurance industry remained one of the least penetrated in the world, with an average of around 2 per cent which is low compared to the global average of around 7 per cent.
“Our industry’s growth keeps getting slowed down by our inability to build substantial capital reserves due to poor saving culture and Premium flight,” he said. “There is still heavy reliance on foreign expertise”.
Speaking further, he said “Our industry is still plagued by poor public image and lack of trust. These and many more are the challenges we face today, and we need to address them if we intend to secure a better future for our industry”.
Also speaking during the conference, Chief Administrative Secretary of the National Treasury and Planning Kenya, Eric Simiyu Wafukho said the insurance industry had a critical role to play in helping companies and nations manage, measure and reduce the impact of climate change.
He explained that the UN’s four principles for sustainable insurance include ESG issues that are relevant to the insurance business in the decision-making process, working with clients and business partners to raise awareness of ESG issues, managing risk and developing solutions.
“We therefore cannot continue with business as usual in the face of increasing frequency and scale of risks caused by climate change,” he said. “We must adjust our business models to better support environmental, social and governance (ESG) issues,”.
Story was adapted from Thisday.
