Building Resilience of Insurance Towards Emerging Risks: F.M. Dr. Mahat
I extend my warm greetings to all of you gathered here today at this esteemed conference Asian Insurance Meet 2023 with the theme “Building Resilience of Insurance towards emerging risks”. I feel honoured to address you as the Finance Minister, and I am delighted to witness such a gathering of experts and professionals dedicated to enhancing the insurance industry.
Distinguished guests,
A well-developed financial system is crucial and contributes to economic growth through an efficient allocation of resources and saving mobilization. The insurance sector plays a pivotal role in securing sustainable development goals. Insurance will be critical to the achievement of six of seventeen Sustainable Development Goals (SDGs) such as Goal 1 – end poverty in all its forms; Goal 2 – end hunger; Goal 3 – ensure healthy lives; Goal 5 – achieve gender equality and Goal 8 – promote sustainable, inclusive and sustainable economic growth. It is also important to the completion of five other SDgs. It acts as a catalyst for risk mitigation, financial stability, and as an enabler of solution that drive social and environmental sustainability. As the Asian continent continues to witness rapid economic transformation, it is essential that our insurance industry adapts to the evolving landscape and effectively addresses emerging risks.
Today, we stand at a critical juncture where we are witnessing an unprecedented rise in risks, both traditional and new. We have experienced the devastating impacts of natural disasters, economic volatility, cyber threats, and pandemics. Pressing issue of climate change, rapid changes in demographics, evolving customer preferences, and advancements in frontier technologies pose significant challenges. These emerging risks not only pose challenges to the stability of insurance institutions but also impact the financial security of individuals, society and businesses across the region.
In the pursuit of building resilience in our insurance sector, collaboration and innovation are paramount. Regulators, insurers, reinsurers, and brokers must work hand in hand to develop robust risk management frameworks, enhance supervisory mechanisms, and promote a culture of innovation. It is imperative to strike a balance between safeguarding the interests of policyholders and encouraging insurers to embrace technological advancements and explore new product offerings.
Additionally, fostering financial literacy and increasing insurance penetration among the population are crucial steps toward building a resilient life insurance market.
In the face of emerging risks, the role of regulators becomes pivotal. Regulators must proactively adapt their frameworks to address the changing risk landscape, while ensuring consumer protection, promoting market stability, and encouraging sustainable growth. Effective regulation requires a harmonized approach, sharing of best practices, and mutual learning among regulatory bodies across Asia and throughout the world.
Insurers and reinsurers, being the backbone of the insurance industry, need to strengthen their risk management practices and underwriting capabilities. They need to be innovative in response to the converging challenges of natural disaster, social exclusion, climate change and lon-term finance. By embracing advanced analytics, artificial intelligence, and machine learning, insurers can enhance their ability to assess risks accurately and improve their claims management processes. Insurers should play a proactive role in assessing and managing climate-related risks, integrating climate risk modelling into their underwriting processes, and encouraging sustainable practices among their policyholders. Reinsurers, on the other hand, should collaborate closely with insurers to develop innovative risk transfer solutions that address emerging risks effectively.
Furthermore, brokers and agencies play a vital role in bridging the gap between insurers and customers. They act as trusted intermediaries and advisors to policyholders. In this era of emerging risks, brokers should focus on enhancing their knowledge and expertise to educate customers about the risks they face and the insurance products available to mitigate them. Embracing digital platforms and leveraging technology will enable brokers to reach a wider audience and provide personalized solutions.
Ladies and gentlemen, building resilience in our insurance sector requires a collective effort from all stakeholders. Collaboration, innovation, and a proactive regulatory environment are the key drivers of success. By working together, we can create an insurance industry that not only protects the interests of our citizens but also contributes to the sustainable development of our nations. Your actions should not just contribute to risk mitigation, economic prosperity, social inclusion and environtal regenation, but also bring multiple co-benfits of enhance consumer trust, insurance growth, and adaption to an evolving market environment.
Distinguished guests,
On behalf of Government of Nepal, I thank all of you for participating in this event and would like to call upon the international communities to extend support for building the institutional capacity of the Regulators and the players of insurance market in order to make Nepalese insurance sector more efficient and credible.
I encourage you all to utilize this conference as an opportunity to exchange ideas, share experiences, and explore collaborative avenues. Let us collectively embark on a journey to build a resilient insurance sector that effectively mitigates emerging risks and safeguards the financial well-being of our societies.
Finally, I would also like to thank the organizers and extend my warm welcome to the participants from overseas and wish you all a pleasant and comfortable stay in Nepal.
Thank you for your attention, and I wish you a productive and engaging conference.
The speech of Asian Insurance Meet 2023: “Building Resilience of Insurance Towards Emerging Risks”
Organized by Nepal Insurance Authority
Hotel Yak and Yeti, Kathmandu
9th June 2023
