Inclusive Insurance needs more innovation and cost reducing mechanisms to become a reality in the CEET region

23 September 2021 — Daniela GHETU
Inclusive Insurance needs more innovation and cost reducing mechanisms to become a reality in the CEET region
"Overall, inclusive insurance is still a nascent business in the CEET region and is not currently a top priority for most insurance supervisors in the area," is the finding of the REPORT ON THE INCLUSIVE INSURANCE REGULATORY LANDSCAPE IN THE CEET REGION recently published by Access to Insurance Initiative (A2ii).

"However," the report states, "all countries are actively encouraging innovation and digitalization in the insurance sector, which can contribute to promoting the appeal, affordability, and accessibility of insurance products," adding that "there is also a commitment among all regulators to promote financial and insurance literacy. The results of various empirical studies demonstrate that the increase of financial literacy is a prerequisite to developing insurance markets."

The survey, commissioned by A2ii, implementation partner of the IAIS on inclusive insurance, took place in March and April 2021, where 32 authorities from 31 jurisdictions17 were invited to respond. This includes a few non-members of the IAIS and a few jurisdictions outside the official CEET region (Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan). Twenty-four authorities completed the survey, all of them officially classified as belonging to the CEET region.

The authors of the Report have concluded: "Key to enabling inclusive insurance markets to grow in the CEET region are policy actions on the supply and demand side. In this respect, there is room for improvement in public-private collaboration mechanisms between governments and the insurance industry, in order to create favorable conditions. The insurance industry needs to create new business models designed towards making insurance inclusive, create more innovative products, and rely on new distribution mechanisms. Finally, regulatory adjustments can provide incentives for innovation and for the use of distribution mechanisms that reduce transaction costs and, importantly, create favorable inclusive insurance regulatory frameworks based on proportionality."

The authors team of the REPORT ON THE INCLUSIVE INSURANCE REGULATORY LANDSCAPE IN THE CEET REGION was formed by Klime Poposki, University St. Kliment Ohridski, N. Macedonia, Gorazd Cibej, Insurance Supervision Agency, Slovenia, Kristina Cencic, Insurance Supervision Agency, Slovenia. Hui Lin Chiew and Teresa Pelanda, representing A2ii, have also supported the report's realization.

Download here the full REPORT ON THE INCLUSIVE INSURANCE REGULATORY LANDSCAPE IN THE CEET REGION.

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