Title: The challenges of climate risks in the insurance sector in Africa
Introduction :
Climate risks are one of the main global concerns today. They have a major impact on different sectors, including insurance. Indeed, extreme climatic events such as storms, floods or even droughts have direct consequences on insured losses. This is why it is essential for African insurance supervisory authorities to understand these risks and find solutions to address them.
Importance of the theme “Climate risks and resilience”:
During the General Assembly of the Organization of African Insurance Supervisory Authorities (O2ACA), which was held within the framework of the Annual Meetings of the IMF and the World Bank in Marrakech, Morocco, the theme “Climate Risks and resilience” was discussed. This theme was chosen to enable African regulators to become aware of the impacts of climate risks on the insurance sector and to draw inspiration from best international practices in terms of resilience.
Objective of the meeting:
The objective of this meeting was to foster inter-African partnership in the field of insurance and to promote cooperation and the exchange of expertise between members of O2ACA. This involves strengthening the supervision of insurance markets in order to ensure effective management of climate risks and better protection for policyholders.
Advocacy for improving technical capabilities:
The Director General of the Insurance Regulatory and Control Authority (ARCA) in the Democratic Republic of Congo (DRC) took this opportunity to present the progress of the insurance sector after its liberalization. He also pleaded with representatives of the IMF and the World Bank for technical support aimed at improving ARCA’s capacities and developing inclusive insurance.
The potential of insurance in the DRC:
The insurance market in the DRC has considerable potential, with an estimate of $1.5 billion. However, the current mobilization represents only 20% of this amount, or around 300 million dollars. This is why ARCA is setting up a program to combat insurance premium evasion and control compulsory insurance, while paying particular attention to raising awareness and popularizing the Insurance Code.
Conclusion :
Climate risks represent a major challenge for the insurance sector in Africa. African insurance supervisory authorities must therefore work collaboratively to develop strategies for resilience and effective management of these risks.. Technical and financial support from international institutions such as the IMF and the World Bank is essential to strengthen the capacities of African regulators and promote the development of a strong and inclusive insurance sector.