Responsible Finance Forum

A2ii: 10 YEARS ON

Hui Lin Chiew
Source:  Access to Insurance Initiative

In the 10 years since the Access to Insurance Initiative (A2ii) was established in 2009, the world has seen some good news. By 2011, the 1990 poverty rate had been cut in half, achieving the first Millennium Development Goal (MDG) ahead of schedule. There have been remarkable improvements in health outcomes. Education and literacy also made progress, overall as well as with reduced gender disparity in some cases.1 More people now have access to financial services: In 2017, the World Bank reported that 69 per cent of adults worldwide now have an account, up from 62 per cent in 2014 and 51 per cent in 2011. The world today is also more con- nected than ever before: over 3.2 billion people have access to and use the Internet, 1.8 billion do so via mobile, while 9 billion have access to a mobile connection, almost doubling from a decade ago.2

The insurance sector, after entering the decade with negative growth in the aftermath of the global financial crisis, is growing again, with much of the momentum coming from emerging markets. Attention is now on strengthening resilience, closing the protection gap and technological innovation, with a particular focus on harnessing the potential of technology while managing the arising risks. Insurance, having lived in the shadow of the banking and payments sectors, is now increasingly emerging as an incubator for innovation in its own right. In tandem with these developments, the focus of insurance supervisors3 is also shifting from post-crisis recovery and standard-setting towards innovation and emerging risks.

Yet for all the steps forward, disparities remain. While extreme poverty is declining, the world is not on track towards achieving ending extreme poverty by 2030. A fraction of the population in some advanced economies are still extremely poor8 . A large proportion of the developing market workforce remains in the agricultural and informal sector, but social protection mechanisms for them remain inadequate9 . Technology and connectivity are also advancing at an unequal pace, and therefore not all countries and groups equally benefit. In many markets, access to private insurance is still a luxury from which the most financially vulnerable remain underserved or excluded. Consumer trust in insurance is low in upper and lower-income jurisdictions alike. A gap persists between developed and emerging market insurance penetration levels, as well as locally between income segments, rural and urban areas, men and women.

By the early 2000s, some pioneering supervisors were taking steps to address the protection gap between rich and poor. By 2009, India, China, the Philippines, Taiwan, Peru and Mexico already had microinsurance regulation in place. The A2ii was established in the same year, borne out of the recognition that it was important to support supervisors around the world in making regulation and supervision more supportive of inclusive insurance, while complying with global standards. The year 2012 saw the International Association of Insurance Supervisors (IAIS) publish the landmark Application Paper: Regulation and Supervision Supporting Inclusive Insurance that carved a path forward for inclusive insurance regulation. Today, 23 have regulatory provisions aimed at fostering inclusive insurance and another 25 are currently developing inclusive insurance regulations. Access to insurance is now front-of-mind for the insurance regulatory community.
The year 2019 marks the 10-year anniversary of the A2ii’s founding. In 2016, the A2ii published a document looking back at how the substance of inclusive insurance regulation has evolved over a decade. This publication takes another step back to reflect, and ask: What forces of change have shaped inclusive insurance regulations in the past 10 years? What has this meant for inclusive insurance and regulatory practices surrounding inclusive insurance? What has the regulatory community achieved, and how can history guide us as we forge ahead?

Above taken from Introduction, and originally published on A2ii’s website