Why was Kenya chosen as a focal country by the iDF Inclusive Insurance Working Group?

According to Pedro Pinheiro the Insurance Development Forum’s (iDF) Inclusive Insurance Working Group (IIWG) has selected 21 focus countries through a rigorous process that aimed at ensuring diversity and took into consideration political will and stability; legal and regulatory environment; development of the insurance market; the presence and interest of the IIWG members, among other criteria. Out of those 21 countries, four priority countries (Mexico, Kenya, Indonesia and the Philippines) were chosen for intervention in the initial four-year period.

Kenya is a member of the Vulnerable-20, a group of (currently) 55 climate-vulnerable economies that call for the immediate establishment of a separate and dedicated international funding for loss and damage crisis-level adaptation action. It is also one of the most dynamic insurance markets in the African continent, where many members of the Microinsurance Network, such as AB Consultants, APA Insurance, Britam, Democrance, WFP, are based or have operations and projects, which allowed for a great coordination on the ground to deliver a very successful in-person kickoff of the country taskforce.

What are some of the noteworthy insights on inclusive insurance that emerged from the recent workshop?

Pedro Pinheiro: The engagement of the local market was really outstanding. It is clear there is a will to share experiences and coordinate efforts to come up with joint solutions that address the main challenges to unlock the great potential of the inclusive insurance market in Kenya, especially in relation to distribution and digitalization of enrollment and claims processes.

It was also very evident that there is already an enabling regulatory environment in place for innovation in inclusive insurance, considering the long journey and accomplishments of the supervisory initiatives such as the regulatory sandbox and the Bima Lab Accelerator Program, but some improvements could be implemented in terms of simplifying policy wordings, facilitating payment arrangements and implementing alternative dispute resolution mechanisms, for example.

In practice, while there have been many pilot initiatives in the field of climate and agriculture insurance, scalability is still an issue and it seems that the market could benefit from the kind of support that is offered by the iDF and its member organizations in terms of technical and financial support not only for premium subsidies but also for products development and risk modelling. On the Life & Pension segment, conciliating the long term benefits of these products with the short term financial priorities of low-income customers is the main challenge, and there is clearly a big role for financial education to generate risk awareness and risk management capabilities for the new generations. The Health segment is probably one of the most challenging, with a clear need for better coordination with the Government and suppliers in order to optimize the use of resources to make insurance products more affordable and ensure sustainability.

Finally, it was interesting to see the active engagement of actuaries at the forefront of innovation in the Kenyan market, as even the availability of those professionals can be a challenge in other developing markets.

In your view, what are the gaps in the insurance industry in Kenya that should be addressed to take inclusive insurance to the next level?

Pedro Pinheiro: Building on the previous answer, my key takeaways for the moment would be:

1. Supporting the local coordination for developing joint solutions in distribution and digitalization of enrollment and claims processes.
2. Facilitating the industry’s engagement with the supervisor under the existing spaces for testing more flexible solutions and improving the current microinsurance regulatory framework.
3. Experimenting with new solutions with technical and financial support from international organizations.
4. Establishing a dedicated forum with relevant stakeholders to come up with a joint strategy for addressing the challenges in the health segment.
5. Strengthening widespread strategies for financial education with a focused insurance and risk awareness component.

Of course, these ideas must be filtered and improved by the Country Taskforce driven by the local players, with the leadership of the Association of Kenyan Insurers (AKI), the Insurance Regulatory Authority (IRA), and the numerous private and public sector players who already came onboard at the Workshop.

What next steps did stakeholders prioritize during the recent inclusive insurance workshop in Kenya? Quick wins?

Pedro Pinheiro: We are already seeing some first movers coming up with projects. We expect this trend to evolve, with more solutions being designed in partnership by the many players involved in the Country Taskforce, and, ultimately, with the development of a country roadmap comprising a list of projects aimed at delivering a defined level of uptake in the country.

What are iDF’s plans to move this agenda forward, based on the priority actions identified above?

Pedro Pinheiro: With the Country Taskforce in place, we now plan to share the results of the gap assessment produced in the workshop for review and improvement. Once that step is completed, we will define the action plan to be implemented by the local market with the relevant stakeholders in each area. The end goal, as mentioned, would be to come up with a country road map to guide scalable solutions by providing the right support through the IIWG.

How does iDF deploy its interventions on the ground, and monitor them?

Pedro Pinheiro: The iDF is a public/private partnership led by the insurance industry and supported by international organizations, that was first announced at the United Nations Conference of the Parties (COP21) Paris Climate summit in 2015 and was officially launched by leaders of the United Nations, the World Bank and the insurance industry in 2016.

The iDF aims to optimize and extend the use of insurance and its related risk management capabilities to build greater resilience and protection for people, communities, businesses, and public institutions that are vulnerable to disasters and their associated economic shocks. The iDF brings together industry experts (insurers, reinsurers, brokers) multilateral organizations, non-governmental organizations and public sector institutions that share its objectives and goals.

As one of the five IDF Working Groups, the Strategy of the IIWG consists of establishing a Country Taskforce in each focus country, bringing together the players working in the inclusive space, in order to assess the gaps and opportunities and design a roadmap of activities, with a list of projects that could be supported by international organizations in order to achieve a determined level of scale. The ultimate goal is to support the market in increasing the uptake of inclusive insurance coverage in order to achieve the InsuResilience Global Partnership Vision 2025 of having an additional 500 million people covered by insurance protection, out of which 150 million people should be covered through inclusive insurance.

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Pedro Pinheiro is the coordinator of the Insurance Development Forum (iDF) Inclusive Insurance Working Group, a position housed at the Microinsurance Network – MiN and jointly funded by the iDF and the United Nations Development Programme’s Insurance and Risk Financing Facility.

Pedro has 10 years of experience in the insurance industry, having managed various multi-stakeholder projects with a focus on inclusive finance, consumer protection, sustainable insurance & innovation at the Brazilian Association of Insurers.

He also has experience in the payments, credit and financial market infrastructure segments, having been part of the team that established the insurance operation of a Nasdaq-listed fintech group under the first regulatory sandbox edition in Brazil.

He has a practical and academic focus on economic regulation, with a Master of Laws (LLM) in State Law and Regulation from Fundação Getúlio Vargas (FGV) and an LLM in International Law from the London School of Economics and Political Sciences (LSE).