Nepal will be the host nation for the 3rd SAARC Insurance Regulators’ Meet and International Insurance Conference, which was cancelled last year due to the devastating earthquake that hit the nation in April 2015. The country has not fully recovered from the tragedy but is ready to welcome delegates for the event which will be held on the 12-13 May 2016 in Kathmandu.
The South Asian Association for Regional Cooperation (SAARC) Insurance Regulators’ Meet and International Conference has been held annually since 2013 and is aimed at developing and expanding regional collaboration and cooperation in the insurance and reinsurance industry among the eight nation countries in South Asia. SAARC nations comprise Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
A platform for regulators, insurers and reinsurers of SAARC countries to meet and discuss current issues affecting their markets, the conference’s theme this year is “Enhancing insurance outreach through regional co-operation”.
This is not only timely but also befitting in attracting the attention of the developed insurance markets as well as countries that currently have low insurance penetration levels. The past two SAARC conferences were held in Dhaka in 2013 and Karachi in 2014.
Huge potential exists in the SAARC region
The combined economy of SAARC is the third largest in the world in terms of GDP (PPP) after the US and China, and fifth largest in terms of nominal GDP.
SAARC nations comprise 3% of the world’s area, contain 21% of the world’s total population and make up around 9.12% of the global economy. Their combined foreign exchange reserves stands at US$411 billion as of 2015.
The South Asian region is today considered as one of the fastest growing regions of the world with the region contributing 2% of world trade and 1.7% of world FDI. Trade and commerce among SAARC nations has huge potential to grow, as currently intra-regional trade is less than 6% of the region’s total global trade and intra-regional FDI accounts for 3% of total FDI inflows.
Critical issues to be discussed
The dictates of the global economic landscape has resulted in the Insurance Regulators of the SAARC region working to enhance regional cooperation in South Asia.
The entire South Asian region has low insurance penetration, and SAARC regulators in the past have been stressing on the need to commence a joint effort to extend insurance services to the poor within the region.
The region has been facing issues of political conflict, global climate change, diseases, droughts and famines, and strategies will have to be crafted that will help mitigate the effects of these events on the general populace and business.
Experts at the conference will lead the discussions in the latest trends and innovations in short term and life insurance products, rapidly changing regulatory frameworks and also on mobile technology as a tool for insurance distribution. There will also be discussions in areas where the SAARC markets can collaborate, including in insurance literacy campaigns, innovative product design, capacity building program and reinsurance strategy.
Disaster management to be key focus
The South Asian region is one of the most vulnerable regions that has been impacted by climate change and natural disasters.
The Nepal earthquake in 2015 caused economic losses of over $2 billion and only a fraction of this was insured. The Nepal government does not have the financial reserves or access to contingency financing to allow them to absorb losses, recover and rebuild following a disaster and the international community had to contribute large sums for the rebuilding process. There is an urgent need to push insurance as a viable option for such emergency situations in the region.
At a recent SAARC Ministers conference, there were calls to create a viable ecosystem of regional integration, cooperation and socio-economic development and this will help the region to fight the common enemies in poverty, illiteracy, terrorism and environmental degradation. There are also plans to set up a dedicated satellite for SAARC countries which will support applications in health, education, disaster response, weather forecasting and communications. The insurance industry will have a key role in the region and it is expected that this month’s event will help to enhance the necessary regional cooperation.