22 hours Ago By Roger A. Agana
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.
gh/african-insurers-advocate-climate-resilience-at-accra-summit/More than 250 insurance leaders, regulators, and policymakers convened in Accra this week for the inaugural Nairobi Declaration on Sustainable Insurance (NDSI) Summit, aiming to address Africa’s escalating climate risks and mobilize insurance capital for sustainable development.Hosted by Ghana’s National Insurance Commission and supported by FSD Africa, the three-day event emphasized expanding agricultural coverage, derisking renewable energy projects, and aligning industry practices with global climate goals.Africa faces an estimated $440 billion in climate-related economic losses, yet fewer than 3% of the continent’s farmers—central to an agricultural sector employing 60% of its workforce—have access to insurance.
Dr. Abiba Zakariah, Commissioner of Ghana’s National Insurance Commission, urged collaboration, citing an Ethiopian proverb: “When spiders work together, they can tie up a lion.” She stressed the urgency of scaling parametric insurance, which uses objective triggers like rainfall levels to expedite payouts during droughts or floods.
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, outlined government efforts to prioritize green financing, calling on insurers to develop products that protect smallholder farms and attract private investment to renewable energy. “Derisking green projects is essential to unlock capital,” he said, noting that renewable initiatives require high upfront costs often deterring investors.
The United Nations estimates insurance-backed mechanisms could catalyze $2.8 trillion in climate finance by 2030.Discussions also highlighted regulatory challenges, including outdated capital requirements and slow approval processes for innovative insurance products.
Philip Lopokoiyit, NDSI Chair and CEO of ICEA Lion Group, emphasized insurers’ dual role as risk managers and institutional investors. “Long-term portfolios must drive systemic change,” he said, though less than 10% of Africa’s insurance capital currently supports sustainable projects.The summit underscored how digitization could broaden access for underserved communities, while decentralized energy systems demand tailored coverage models.
Yet experts cautioned that without policy reforms—such as redirecting fossil fuel subsidies to renewables—progress would stall.The NDSI initiative, launched in 2021 under UN-backed principles, now boasts 230 signatories committed to embedding sustainability into underwriting, investments, and governance. Its focus mirrors global frameworks like the EU’s Sustainable Finance Disclosure Regulation but adapts to Africa’s unique challenges, including fragmented markets and infrastructure gaps.
Parametric insurance has seen success in regions like Central America, where it mitigates hurricane losses. However, replicating this in Africa requires robust data infrastructure and regulatory buy-in. Similarly, while European insurers have allocated billions to green bonds, African counterparts face hurdles like currency volatility and political instability.
The summit’s outcomes hinge on translating dialogue into action. As Dr. Zakariah noted, collaboration alone cannot “tie up the lion” of climate risk.
Policymakers must now accelerate reforms, ensuring insurers have the tools to transform resilience from aspiration to reality. News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.
com.gh/african-insurers-advocate-climate-resilience-at-accra-summit/.
