News Type: News

NAICOM promises to strengthen insurance services in Nigeria

Posted on by TIMOTHYRADIER

The National Insurance Commission (NAICOM) has promised to raise the level of the insurance services in Nigeria to match global standards.

Sunday Thomas, the commissioner for Insurance/CEO National Insurance Commission (NAICOM) said this during a seminar organised by the Commission for insurance journalists in Lagos with the theme “The Future of the Nigerian Insurance Sector in a Shifting Landscape.”

Thomas said they will do this through continued mutual collaboration with the media and other relevant stakeholders.

According to Thomas: “As regulators, we would continue to consolidate on the administration’s cardinal agenda of developing the market and fostering insurance inclusion along with mutual collaboration of the press and other relevant stakeholders.”

Thomas said the Commission will continue its execution of various regulatory and market development initiatives to uplift the insurance sector to global standard.

“This will be achieved through a 12-point laid down initiative that will focus on engaging stakeholders including state governments towards ensuring domestication of the laws to ensure compliance with compulsory insurances and improve the business of insurance in their respective states; driving the Market Development and Restructuring Initiative (MDRI) to promote compulsory insurance products; feasibility Assessment for Index Based Risk Transfer Solution in the agricultural sector; financial Inclusion Drive via focused Insurance awareness campaign for the financially excluded.”

“Other areas are, launch of the Insurtech Accelerator Platforms under the Insurance Market Development programme i.e Bimalab Programme in conjunction with FSD Africa; ongoing synergy with FSD Africa on developing a Risk Based Capital Model for the Nigerian Insurance Industry; promoting the development of products and business models that meet the needs of the financially excluded group; automation of the Commission’s processes; actuarial capacity development programme; risk based supervision regime; regional Integration and setting up of the insurance sector committee on African Continental Free Trade Area (AfCFTA) amongst others.”

“Stemming from the theme for this seminar, it is worth noting that insurance over the ages has always been seen as a business that exists for the survival of other businesses.”

“At this period of rejuvenation, it calls for the Nigerian insurance sector to develop innovative products and distribution channels, embark upon massive infrastructural development, improvement in social safety nets scheme, rejig business continuity plans and general deployment of technology to meet the expectation of today’s consumers and create new experiences that add value,” Thomas said.

Read also: Insurance industry’s gross premium income grows 65.6% in 5years

On importance of insurance, NAICOM boss said, “The insurance sector plays a vital role in financial inclusion because it reduces the poverty line, assist people to manage their risk and protect them from negative adverse effect of any unforeseeable circumstances as well as increases access to other financial services

“In today’s modern business environment, disruption plays an integral part of any business, hence innovation being implemented by the Commission is geared towards gaining control of a specific segment of the market that has been left untapped by encouraging the introduction of products tailored to the consumers in order to grow insurance businesses.”

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African insurers pledge $14bn of cover to take up climate change fight

Posted on by TIMOTHYRADIER

This commitment comes as Africa continues to face irreversible loss and damage associated with global climate change impacts such as drought, flood and tropical cyclones.

With African nations being among the most exposed globally to the impacts of climate change and nature loss, Africa cannot continue to rely on international aid and developed world climate finance commitments to respond to climate catastrophes.

The ACRF will provide protection for the continent’s most vulnerable communities by providing $14 billion of climate risk insurance by 2030 to African sovereigns, cities, humanitarian organizations and NGOs.

At the same time, the Facility will include a donor-funded Trust Fund that provides premium subsidies, product development technical assistance and policyholder capacity building. The governance of the Trust Fund will be designed to allow swift response to opportunities.

Kelvin Massingham, Director Risk and Resilience, FSD Africa, said: “Mainstreaming resilience into Africa’s economic development is essential to secure future prosperity and sustainable growth. Now is the time for the African insurance sector to play the significant role it should in creating this resilience. The Nairobi Declaration on Sustainable Insurance’s proactive and market-based approach is exactly what we need, and the commitment today is a strong statement to work together to provide an African-led solution to loss and damage.”

Patty Karuihe-Martin, CEO Namib Re, commented: “Irreversible Loss or Damage refers to the calamitous impacts of climate change that cannot be circumvented by mitigation and adaptation alone. So apart from managing risk, crafting affordable risk transfer and risk sharing solutions through compliant, trusted and responsive Insurance and Reinsurance for such loss or damage for the developing countries is a crucial discussion; if not for unfailing and guaranteed resilience then at least to allow for decent work and dignified life to continue.”

Phillip Lopokoiyit, Group CEO, ICEA LION Group, added: “As private sector insurers, we have a key role to play in ensuring a sustainable future. Our priority lies in providing solutions that will support the resilience of our clients in light of the greatest challenge facing humanity. Coming together as signatories to support the set-up of the Africa Climate Risk Facility, will provide the necessary capacity needed by insurers to the solutions that will respond to climate risk.

“The commitment that we have made, as signatories, to underwrite $14 billion of cover for climate risks by 2030, will protect 1.4 billion people against floods, droughts, and tropical cyclones.This is indeed a testament of our quest to ensure that we contribute to the long term sustainability and economic resilience of our countries.“

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Ghana Stock Exchange launches Green Bond Rules at its 32nd anniversary celebration

Posted on by TIMOTHYRADIER

As part of programs to mark its 32nd anniversary, the Ghana Stock Exchange (GSE) in collaboration with its regulator, the Securities and Exchange, launched the new Green and Sustainable Bond Rules to guide the listing and trading of green and sustainable bonds on the Ghanaian market.

This year’s anniversary was under the theme “Investing into a Green and Sustainable Future’.

Green Bonds are bonds that support new or existing projects that generate climate or other environmental benefits that conform to Green Guidelines and Standards while Sustainable bonds support new or existing projects that generate both environmental and social benefits that conform to the Sustainability Guidelines.

The first Green Bond was issued in 2007 by the European Investment Bank under the label Climate Awareness Bond. Due to the role the finance sector plays in allocating capital efficiently, it remains a key channel for economies all over the world to make a real impact. As such, the best way to combat climate change while still making a profit is through the financial market.

In his remarks, the keynote speaker for the event, Mr. Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group in Africa said, “I commend Ghana and the Ghana Stock Exchange for showing leadership in green and sustainability finance. Climate financing is not only a development imperative but also a significant market opportunity.

IFC is committed to working with Ghana’s stakeholders to facilitate investments that reduce greenhouse gas emissions and support climate change adaptation.”
Speaking at the event, the Director General of the Securities and Exchange Commission stated that “Investing in green and sustainable future is both well timed and opportune.

Sustainability is a broader topic that stands on social human, economic and environmental pillars, none of which can be ignored. It is the most pressing challenge of our time for many business leaders. However, there is evidence of a correlation between the long-term success of a business and sustainability. Investors across the world are demanding opportunities to invest in companies or investments with strong ESG markets.”

Delivering his goodwill message at the event, the Senior Financial Markets Specialist at FSD Africa, Victor Nkiiri hinted that “At Financial Sector Deepening Africa (FSD Africa), we see the development of capital markets to an end, to increase income and job creation, access to basic services and building of sustainable futures. Deep liquid markets are fundamental to economic growth because they help channel longer-term domestic savings of an economy to the most productive use.”

In his remarks, the Managing Director of GSE, Ekow Afedzie said, “Green and Sustainable bonds have gained traction globally due to the enormous benefits it brings to the environment and society at large.” GSE has been very committed to sustainability initiatives over the past years culminating in our recent admission to the UN Sustainable Exchanges in July.

The launch of ESG Disclosure Manual Guidelines in November this year is another testament to our commitment to this sustainability journey. The launching of Green and Sustainable bond rules today is another milestone on our sustainability journey. Listed companies in Ghana now can tap into these fast-growing bond investment products to raise capital that can be used in supporting ESG initiatives.

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African insurers take up climate change fight with $14 bln pledge

Posted on by TIMOTHYRADIER

Summary

  • 85 insurers make pledge to extend climate cover
  • Comes as COP27 talks focus on issue of loss & damage
  • African Climate Risk Facility to cover 1.4 bln people

SHARM EL-SHEIKH, Nov 9 (Reuters) – A group of over 85 insurers in Africa has pledged to create a financing facility to provide $14 billion of cover to help the continent’s most vulnerable communities deal with climate disaster risks such as floods and droughts.

The commitment to create the African Climate Risk Facility (ACRF) was made on Wednesday during the COP27 climate talks comes as developing countries push their richer peers to do more to help them pay for the costs of responding to such events.

Demand for compensation for the “loss and damage” caused by global warming has long been rejected by wealthy countries, whose leaders are wary of accepting liability for the emissions driving climate change.

Africa, which accounts for less than 4% of greenhouse gas emissions, has long been expected to be severely impacted by climate change.

Against that backdrop, the African insurance plan is based around creating a scalable, local market-based funding tool to help countries better manage the financial risk of climate shocks and increase the resilience of its more vulnerable communities, the group said in a statement.

“This is the African insurance industry saying let’s come together and try and solve this ourselves,” said Kelvin Massingham, director risk and resilience at FSD Africa, one of the partners behind the launch.

“We have a massive risk gap in Africa and existing solutions aren’t working,” Massingham said. FSD Africa is a UK government-backed development group.

The ACRF will provide protection for 1.4 billion people against floods, droughts and tropical cyclones by providing $14 billion of climate risk insurance by 2030 to African sovereigns, cities, humanitarian organisations and NGOs, the insurers said.

The group is calling for $900 million in funding from development partners and philanthropies to support the project, much of which will go towards providing a subsidy on the cost of the premium to help governments and cities with limited fiscal resources buy the cover.

These donor funds will be held in a trust and managed by the African Development Bank.

“The facility will enable us to cover certain risks like floods, cyclones and droughts…and to help us mitigate the risks we face as underwriters dealing with these climate risks,” said Philip Lopokoiyit, chief executive at Nairobi-based insurer ICEA LION Group.

The insurance commitment is the first from the 85 signatories of the Nairobi Declaration on Sustainable Insurance, signed in April 2021 by the industry to support the U.N. Sustainable Development Goals.

The ACRF will provide a domestically funded alternative to global initiatives like the World Bank’s Global Risk Financing Facility and the Global Shield Financing Facility, a new funding facility that will help countries that suffer heavy economic loss due to climate change-driven disasters, announced by World Bank president David Malpass on Tuesday.

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Announcing a Just Transition Finance Challenge

Posted on by Kihingu Inc

Financing a fair and inclusive transition to Net Zero

What is the Just Transition Finance Challenge?

The Just Transition Finance Challenge is a flagship initiative to mobilise more public and private capital into investments that support a Just Transition to Net Zero in the UK and other developed and emerging markets.

Launched by the Impact Investing Institute, with the support of the City of London Corporation, it brings together leading global financial institutions with over £3.6tn of assets and assets under management, including public and private asset owners, asset managers, development finance institutions and advisors, who are committed to financing a Just Transition.

This session presented a new coalition of key investors committed to mobilising capital towards impact investing and ensuring that the investment for a transition to Net Zero is inclusive and socially beneficial.

Moderated by Laurie Spengler, CEO of Courageous Capital Advisors and Senior Advisor for G7 Impact Taskforce, the panel consisted of Sharon Johnson, Chief Operating Officer, AgilityEco; Maria Nazarova-Doyle, Head of Pensions Investments and Responsible Investment, Scottish Widows; and Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments.

 

Current levels of climate finance in Africa falling drastically short of needs

Posted on by Kihingu Inc

A report released today by the Climate Policy Initiative finds that Africa needs approximately USD 2.8 trillion, or USD 250 billion each year, between 2020 and 2030 to implement its Nationally Determined Contributions (NDCs).

The study shows that total annual climate finance flows in Africa for 2020, domestic and international, were only USD 30 billion, just 12% of the amount needed. The financing gap is significant: All African countries together have a GDP of USD 2.4 trillion (World Bank 2021), implying that 10% of Africa’s current annual GDP needs to be mobilized above and beyond current flows every year for the next 10 years.

This analysis is based on the 51 out of 53 African countries that provided data on the costs of implementing their NDCs. Collectively, they represent more than 93% of Africa’s GDP.

Africa needs approximately $2.8 trillion between 2020 and 2030 to implement its NDCs. Out of this $2.5 trillion must come from international public sources and the domestic and international private sectors. These needs represent 10% of Africa’s total annual GDP.

South Africa, Ethiopia, Nigeria, and Egypt have the highest needs per year, together representing almost USD 151 billion per year. These needs as a percentage of GDP vary across countries. For instance, South Africa and Ethiopia have needs of 32% and 23% of their GDP, respectively. While Nigeria’s needs ($12 billion) are only 3% of the national GDP. Similarly, Egypt estimates needs of around $7.3 billion, less than 2% of its GDP.

Adaptation accounted for only 24% of total climate finance needs identified, despite Africa being highly vulnerable to climate change and calls for a better balance of finance between mitigation and adaptation. Adaptation needs are likely to be underestimated due to a lack of data and technical expertise to estimate the true cost of adaptation measures.

Mitigation accounts for the largest share of reported needs in 2020-2030, at 66% of total climate finance needs. Mitigation needs are predominantly split across four sectors: transport (58%), energy (24%), industry (7%), and agriculture, forestry, and other land use (AFOLU) (9%). However, results are heavily weighted to a few countries, in particular South Africa, which accounts for most transport needs. Excluding South Africa, the composition of mitigation needs per sector is energy (39%), AFOLU (27%), industry (20%), and transport (10%).

The private sector has significant potential to meet Africa’s climate finance needs. Public funding alone will not be sufficient, given the magnitude of investments needed, and current and future constraints on public domestic resources in Africa. However, most current climate financing in Africa is from public actors (87%, USD 20 billion) with limited finance from private actors.

To mobilize private finance, public actors need to improve policy frameworks and investment environments and deploy concessional financing to target investment barriers. Investment barriers are typically context-specific but can include technology-specific barriers such as uncertainty with respect to performance; policy barriers such as uncertain permitting processes; investment environment barriers such as lack of liquid financial markets; and bankability barriers such as off-taker creditworthiness and high debt costs.

This paper is part of The State of Climate Finance in Africa series from Climate Policy Initiative, The Children’s Investment Fund Foundation, and FSD Africa. The Landscape of Climate Finance in Africa report will be published later this summer.

New partnerships to enhance Egypt’s financial market

Posted on by Kihingu Inc

Enhancing Egypt’s efforts on ESG, strengthening local and regional insurance businesses and supporting investments towards innovation for climate resilience.

Egypt’s financial market is set to benefit from announcements made by the UK government in partnership with FSD Africa in enhancing activities aligned to decarbonisation, resilience, and natural capital.

Through a series of stakeholder engagements and high-level meetings with leading institutions and policymakers, the partners identified and committed to supporting Egypt’s efforts in climate risk management and human development by paying special attention to the country’s vulnerable populations.

Since 2016, Egypt has undertaken a series of reforms aimed at strengthening the local economy and attracting foreign investments. These reforms have helped the economy avoid many of the adverse impacts of the Covid-19 pandemic. As the Egyptian economy looks to recover and respond to new challenges, including the economic impact of the war in Uk initiatives such as those announced this week will further boost national efforts for building a more resilient economy.

Key highlights of the engagements include:

Support towards innovation for climate resilience

Egyptian-based tech start-up Baramoda won a Fintech x Climate Resilience Startup challenge. The challenge sought to identify solutions working to improve the resilience of climate-vulnerable communities in Africa.

Baramoda’s solution focused on maximizing the efficiency of agri-waste management by addressing soil pollution and agricultural waste. Baramoda innovates organic soil improvers and fertilizers from different types of agricultural waste. This tailored compost is made from organic and natural components for the health of Egyptian land.

Recently, FSD Africa announced similar support for Africa-focused fintech startups with solutions that enable climate resilience in the most vulnerable communities.

FSD Africa also participated in an eye-opening investor roundtle with leading Egyptian venture capitalists hosted by the American University in Cairo (AUC) Venture Lab discussing Climate Resilience solutions.

Sign-up for The Nairobi Declaration

FSD Africa recognises the contribution insurers can make to climate change and in producing better outcomes for the continent. To this end, the organisation has urged Egypt-based stakeholders to commit to the Nairobi Declaration on Sustainable Insurance as a first step toward creating a sustainable insurance industry and building resilience for the continent.

The partners have stressed the importance of all businesses across Africa in engaging with the net-zero ambitions, agreeing that by playing its role, the insurance industry will be critical in building a sustainable environment for the future.

MoU with the Egyptian Financial Regulatory Authority to advance the implementation of ESG principles in North Africa

FSD Africa is in advanced discussion with the Egyptian Financial Regulatory Authority (FRA) to jointly drive the integration of ESG principles across the insurance sector in Egypt. Through the MoU, FSD Africa and the FRA will directly engage with local insurers and, in due course, work together to deliver the Africa Climate Finance Leadership Course in North Africa.

The Africa Climate Finance Leadership Course will enhance the capacity of regional policymakers, regulators, academia, and financial market participants to support climate-related projects. The training will also provide guidance for these regional actors to access climate funds from global sources and fast-track capital mobilization for climate projects across North Africa.

FSD Africa is committed to working with regulators and government agencies to identify, mitigate and manage climate risks and opportunities. Through our new partnerships, Egypt and its neighbouring countries will have an opportunity to significantly address the risks of climate change and accelerate the transition to a high-potential green economy.
Mark Napier, CEO – FSD Africa

Extending financial services to refugees in Rwanda with Equity Bank

Posted on by Kihingu Inc

The pilot project aims to give 100,000 refugees in Rwanda access to financial services through mobile phones.

Together with Equity Bank Rwanda PLC, we have just launched in the field a Financial Inclusion for refugees (FI4R) programme that aims to provide financial services to over 90,000 refugees in Rwanda.

Through this programme, refugees will be able to access mobile banking & agency banking services like opening accounts, receiving, and sending money, saving, digital loans, insurance and others through unstructured service data (USSD) channels. Furthermore, the project will provide financial literacy training to equip the refugees with knowledge on how to manage their finances.

The need to extend financial services to vulnerable groups like refugees, cannot be understated. With easier access to financial services and knowledge of how to manage their personal and business finances, refugees across Rwanda will be able to transact safely and with ease. Access to and usage of financial services can allow low-income households, including refugees, to build assets, mitigate shocks, increase resilience, and contribute to the local economy.

The project builds on earlier work funded by FSD Africa and Access to Finance Rwanda (AFR) in partnership with UNHCR following a market assessment done by BFA Global that outlined refugees financial needs and provided a business case for financial institutions to serve them. It also identified barriers refugees face when accessing financial services and offered solutions to overcoming them.

The project was officially launched in Mahama Refugee Camp in Kirehe District, Eastern Province. Mahama Refugee Camp is the largest refugee camp in Rwanda, hosting over 47,000 refugees from Democratic Republic of Congo, Burundi and several other neighbouring countries.

Refugees have financial and other needs like everybody else. It is therefore imperative for the financial sector to serve them just as they would anybody else. Refugees are engaged in economic activities, have incomes and spend; the financial system should facilitate such activities.
Kuria Wanjau, Programme Manager for Fragile Communities and States

There are plans to expand the project to refugee populations in Uganda and the Democratic Republic of the Congo.

Ethiopia’s financial markets receive boost from UK-aid via FSD Afri

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The launch of FSD Ethiopia and partnerships with Ethiopia Investments Holding will enhance efforts to deliver beneficial development and financial outcomes for a stronger more resilient national economy.

Ethiopia’s financial markets have been boosted by a series of announcements and commitments by Financial Sector Deepening (FSD) Africa, a specialist development agency working to strengthen financial markets across sub-Saharan Africa.

The announcements were made as part of a week-long visit led by senior leaders from the UK-Aid funded agency in collaboration with partners. These included the Ethiopia Ministry of Finance, Ethiopia Investments Holding, National Bank of Ethiopia, and the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI).

From progress in establishing a securities exchange to launching FSD Ethiopia and solutions to help the country’s insurance industry respond to climate change, the initiatives will enhance the strength and health of Ethiopia’s f markets, building the foundations for a stronger more resilient national economy.

18th May – Establishment of the Ethiopia Securities Exchange: Ethiopia’s Ministry of Finance, the Ethiopian Investment Holdings and FSD Africa signed a cooperation agreement to establish the Ethiopian Securities Exchange (ESX). Once established, the ESX will become the 30th exchange on the continent. At least 50 companies, including banks and insurance companies, are expected to list at the launch of the exchange.

18th May – Investors RoundTable: Our investment arm, FSD Africa Investments held an investments roundtable in Addis introducing its work as a provider of early-stage, risk-bearing capital and as a catalytic investor, seeking to drive innovative models and products that can address gaps in Africa’s financial market.

19th May – Launch of FSD Ethiopia, which will work to enable the development of the country’s financial sector. With funding from UKAID and the Bill and Melinda Gates Foundation, FSD Ethiopia will build on FSD Africa’s initial efforts to enhance the country’s financial sector.

20th May – Ethiopian insurers endorse Nairobi Declaration on Sustainable Insurance: Insurance stakeholders in Ethiopia have thrown their support behind the Nairobi Declaration on Sustainable Insurance. The Nairobi Declaration on Sustainable Insurance is a continental commitment by African insurance industry leaders to support the achievement of the SDGs. The Nairobi Declaration brings together local and international insurance firms to promote the achievement of SDGs and make it easier for them to understand the commitment to support the achievement of the SDGs.

We are pleased to be collaborating with the Government of Ethiopia in this historic initiative that will accelerate the development of capital markets in Eth Our assistance for establishing the Ethiopian Securities Exchange will leverage FSD Africa’s vast expertise and experience in developing capital markets infrastructure across Africa.
Mark Napier, CEO