Insurance Sector Holds Potential for Enhancing Sustainable Development – Thomas

Mr. Sunday Olorundare Thomas, the Commissioner for Insurance, has said that the insurance sector holds potential for enhancing sustainable development with the 2030 Agenda.

Thomas who stated this while speaking at the declaration on sustainable insurance conference held in Lagos at the weekend said environmental, social and governance (ESG) issues constitute a shared risk to insurers, businesses, governments and society.

“Some ESG issues such as, climate change, pollution and eco-system degradation, have various ramifications. Some of these issues are now considered as likely to be financially material to the success of organisations. There is therefore the compelling need for innovation and collaboration”, the commissioner stated.

He said the four Principles for Sustainable Insurance formalise the commitment of the signatories to ensuring decision-making along ESG criteria; raising awareness with clients and partners on ESG criteria; collaboration with governments and regulators to promote action on ESG criteria; and accountability and transparency of progress in ESG implementation.

According to him, the corresponding list of possible actions provides a common anchor and framework for the insurance industry to manage ESG issues.

This he said was expected to enhance the industry’s contribution to building resilient, inclusive and sustainable communities and economies.

On the regulatory side, Thomas said the current environment was increasingly becoming complex adding that this had heightened the need to ensure effective supervision as well as resolve broader policy challenges such as inclusive economic development, sustainability, climate risk and digitalisation.

He said insurance regulators, therefore, have a vital role to play in sustainable economic development.

According to him, they will do this through regulatory and policy initiatives adding that regulators could guarantee that their insurance jurisdictions offer the essential range and variety of products and services that support the SDGs.

“Supervisors can also act as conveners of key stakeholders to building partnerships to coordinate insurance solutions, especially when faced with multifaceted risks such as climate change and pandemic risk,” he said.

He said the conference aimed to explore ways that insurance could play a significant role in helping African countries achieve the United Nation’s Sustainable Development Goals (UN SDGs) in terms of economic growth, social inclusion, and environmental protection and ensure sustainable development in the African insurance sector.

“It would appear that the role of insurance has been somewhat relegated within the context of the SDGs. This is because the current indicators largely do not capture specific insurance related metrics. To be able to better assess the role of insurance and motivate the industry to contribute more to the SDGs, more consistent and disaggregated data collection is recommended” he stated.

He noted that the insurance industry performed a very critical role in promoting economic, social and environmental sustainability and could help countries achieve the UN SDGs.