Asian Insurance Meet 2023 : Finance Minister’s directive to regulators and companies to increase capacity

 Finance Minister Dr. Prakasharan Mahat addressed the Asian Insurance Meet 2023 organized by Nepal Insurance Authority. Finance Minister Mahat addressed the conference which started yesterday along with inaugurating today’s program. Finance Minister Mahat said that insurance will play an important role for sustainable development and said that insurance is working in the areas of social, economic, cyber risk and environmental risk reduction. He said that this conference will help in the context of increasing new risks including natural disasters.

As the risk of climate change is high in Asian countries, he has suggested to increase the capacity of insurance companies, reinsurance companies and brokers to cover financial and material losses that may occur in the future. He emphasized on increasing access to insurance by using new technology. He said that the insurance sector should also adopt such technologies in the context of the recent development of new information and technologies such as AI. According to his analysis, the scope of insurance will be wider with the use of such technology. He said that in order to increase access to insurance, special attention should be paid to the structure and underwriting of insurance.

Finance Minister Mahat argues that the latest methods should be sought in the transfer of risk. Dr. Mahat has called on all Asian countries to make joint efforts to increase their risk bearing capacity. He said, “If we all try to increase our capacity in a coordinated manner, we will succeed in sustainable development.” He also called on everyone to move forward as one.

The speech given by the Minister of Finance in the program is as follows:

Excellences, distinguished participants, ladies, and gentlemen, I extend my warm greetings to all of you gathered here today at this esteemed conference Asian Insurance Meet 2023 with the theme “Building Resilience of Insurance towards emerging risks”. I feel honored to address you as the Finance Minister, and I am delighted to witness such a gathering of experts and professionals dedicated to enhancing the insurance industry.

Distinguished guests,

A well-developed financial system is crucial and contributes to economic growth through an efficient allocation of resources and saving mobilization. The insurance sector plays a pivotal role in the economic development of any nation. It acts as a catalyst for risk mitigation, financial stability, and sustainable growth. As the Asian continent continues to witness rapid economic transformation, it is essential that our insurance industry adapts to the evolving landscape and effectively addresses emerging risks.

Today, we stand at a critical juncture where we are witnessing an unprecedented rise in risks, both traditional and new. We have experienced the devastating impacts of natural disasters, economic volatility, cyber threats, and pandemics.  Pressing issue of climate  Change, rapid changes in demographics, evolving customer preferences, and advancements in technology pose significant challenges. These emerging risks not only pose challenges to the stability of insurance institutions but also impact the financial security of individuals and businesses across the region.

In the    pursuit  of            building resilience            in            our         insurance            sector, collaboration and innovation are paramount.  Regulators, insurers. Reinsurers. And brokers must work hand in hand to develop robust risk management     frameworks,      enhance   supervisory mechanisms.  And promote a culture of innovation. It is imperative to strike a balance between safeguarding the interests of policy older and encouraging insurers to embrace technological advancements and explore new product offerings.

Additionally, fostering financial literacy and increasing insurance penetration among the population are crucial steps toward building a resilient life insurance market.

In the face of emerging risks, the role of regulators becomes pivotal. Regulators must proactively adapt their frameworks to address the changing risk landscape, while ensuring consumer protection. Promoting market stability, and encouraging sustainable growth. Effective regulation requires a harmonized approach, sharing of best practices, and mutual learning among regulatory bodies across Asia and throughout the world.

Insurers and reinsurers, being the backbone of the insurance industry. Need to strengthen their risk management practices and undenuiting capabilities. By embracing advanced analytics, artificial intelligence, and machine learning, insurers can enhance their ability to assess risks accurately and improve their claims management processes. Insurers should play a proactive role in assessing and managing climate-related risks,      integrating  climate  risk                 modeling             into  their  underwriting g processes,      and        encouraging       sustainable         practices                among  their Policyholders.  Reinsurers, on the other hand, should collaborate Closely with insurers to develop innovate risk transfer solutions that address emerging risks effectively.

Furthermore, brokers and agencies play a v ital. role in bridging the gap between insurers and customers. They act as trusted intermediaries and advisors to policyholders. In this era of emerging risks, brokers should focus on enhancing their knowledge and expertise to educate customers about the risks they face and the insurance products available to mitigate them. Embracing digital platforms and leveraging technology Ill enable brokers to reach a wider audience and provide personalized Solutions.

Ladies and gentlemen, building resilience in our insurance sector requires a collective effort from all stakeholders. Collaboration, innovation. And a proactive regulatory environ end are the key drivers of success. By working together, we can create an insurance industry that not only protects the interests of our citizens but also contributes to the sustainable development of our nations.

Distinguished guests,

On behalf of Government of Nepal, I thank all of you for participating in this event and would like to call upon the international communities to extend support for building the institutional capacity of the Regulators and the players of insurance market in order to make Nepalese insurance sector more efficient and credible. I encourage you all to utilize this conference as an opportunity to exchange ideas, share experiences, and explore collaborative .