By Antonella Abategiovanni, Executive Director, Financial Inclusion Forum
On 15 May 2024, the Financial Inclusion Forum hosted a dynamic event focused on the role of parametric insurance in advancing financial inclusion. The occasion brought together experts, innovators, and practitioners to discuss how parametric insurance can protect vulnerable populations from climate risks and other unforeseen events. The event was divided into two engaging segments: a fireside chat led by Kshitij Anand, Head of International Strategy at Aon, and a panel discussion chaired by Rishi Raithatha, Co-Chair of the Financial Inclusion Forum.
Part 1: Fireside chat with Kshitij Anand
The event started with a fireside chat featuring well-known industry experts Alex Milne – Head, Eurasia, Middle East & Africa at TheCityUK, Carla Jordan – CEO at Santam Specialist Business Limited (UK) and Mathilda Ström – founder and CCO at CarbonPool. Anand opened the discussion by highlighting the critical importance of financial inclusion, emphasising that over four billion people globally lack access to basic financial services. He outlined how parametric insurance, with its ability to provide swift payouts based on predefined triggers for natural disasters, can play a pivotal role in narrowing this gap.
Key takeaways:
- Innovative solutions for diverse needs:
- Alex Milne shared insights from his experience in Kenya, illustrating how parametric insurance can provide rapid financial relief to communities affected by (the recent) floods and other natural disasters.
- Mathilda Ström highlighted the role of parametric insurance in climate resilience, specifically relating it to her work in protecting carbon credits and investments in carbon-reduction projects.
- Challenges and opportunities:
- Carla Jordan highlighted the challenges of implementing parametric insurance in regions with limited access to technology, emphasizing the need for innovative distribution channels to reach rural and underserved populations.
Part 2: Panel discussion led by Rishi
The second part of the event featured a panel discussion with Andrea Camargo – Microinsurance Programmes Lead at World Food Programme, Emma Karhan – Head of Public-Private Partnerships Aon UK, and Kipkorir Koskei – Director Strategic Partnerships and Policy at the Insurance Development Forum. Almost resembling a group of colleagues brainstorming, the panel focussed on the practical applications of parametric insurance, sharing case studies and experiences from various regions.
Key Discussion Points:
- Building trust and understanding:
- Emma Karhan emphasized the importance of building trust with local communities and governments. She shared examples of successful partnerships with organizations like the International Federation of the Red Cross to develop insurance products that meet the specific needs of vulnerable populations.
- Innovative models for resilience:
- Andrea Camargo discussed the Rural Resilience Initiative by WFP, which integrates insurance with risk reduction, savings, and credit to enhance the resilience of smallholder farmers. She stressed the need for comprehensive solutions that alleviate multiple aspects of vulnerability.
- Public-private partnerships:
- Kipkorir Koskei highlighted the critical role of public-private partnerships in scaling parametric insurance solutions. He shared insights from the Insurance Development Forum’s collaboration with the UN and other international bodies to co-create innovative insurance products that address the needs of developing countries.
Conclusion: Bridging gaps with parametric insurance
The Financial Inclusion Forum’s event on parametric insurance underscored the potential of innovative insurance solutions to bridge financial inclusion gaps and enhance resilience against climate risks. The discussions highlighted the importance of collaboration and trust-building and the need for continuous innovation to adapt to the evolving challenges faced by vulnerable communities worldwide.
As the event concluded, it was clear that while parametric insurance is not a panacea, it can serve as a valuable tool in the broader effort to achieve financial inclusion and climate resilience. The insights and experiences shared by the speakers provided a roadmap for future initiatives and underscored the Forum’s commitment to fostering inclusive and sustainable solutions.
Watch the full conversation here https://www.youtube.com/watch?v=61jDn9iLVMU&t=24s
Stay tuned for more updates and join us in our journey to make financial inclusion a reality for all.
For more information about upcoming events and initiatives, visit Financial Inclusion Forum.
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