1. Regulatory challenges and perspectives for positive growth
AIO Life Seminar
Togo, 26 November 2015

2. Why is regulation important?
Agenda
What is the current level of observance of the IAIS Insurance Core Principles (ICPs) in Sub-Saharan Africa?
Why is regulation important?
Why is a proportionate approach to regulation needed?
What key lessons are emerging from the development of inclusive insurance regulation?
What new regulatory challenges are being seen? .

3. Observance of the IAIS’s Insurance Core Principles in Sub-Saharan Africa
A2ii analytical review of ICP observance: preliminary results
Average overall ICP Observance was 5.6, which is less than Largely Observed
73% of all ICPs (19 of 26) assessed less than Largely Observed
There are significant differences in overall level of observance of the ICPs from 2.1 (less than Partly Observed) to 8.7 (Largely Observed)
Considerable work is needed to strengthen insurance supervision and regulation in Sub-Saharan Africa

4. Why is regulation important?
Effective regulation is essential to build market confidence
The International Association of Insurance Supervisors (IAIS) ICPs represent globally agreed international benchmark for insurance supervision
Important that the ICPs are implemented in accordance with the nature, scale and complexity of individual insurers – i.e. proportionality!

5. Why is a proportionate approach needed to regulation?
Benefits expected:
More insurers incentivised to offer products to low-income clients by allowing wider distribution options and lighter compliance requirements
Low-income clients protected and motivated by provision of simple products, clarity and adapted processes
Policy /strategic objective:
Ensuring broad-based access to (inclusive) insurance
…provided by the private sector
…while protecting the insured.

6. The state of inclusive insurance regulation
2005
2012

7. Adopting the regulatory framework alone is not sufficient
Some Emerging Lessons
Adopting the regulatory framework alone is not sufficient
Financial education
Industry training
Supervisor training and supervisory systems
Data should be collected for performance monitoring
Obligations and incentives need to be balanced
Fast-developing markets: test and lean approach
Inclusive insurance framework should be integrated with other regulations

8. Supervisory challenges: a global perspective
Non-traditional mass distribution channels
Shifting power dynamics - away from licensed insurer
Need to cooperate and coordinate with non-insurance regulator
Speed of growth through mass distribution challenges low-risk assumption
Consumer protection requirements for new policyholders (esp. for low-income population)
Product innovations - new and more complex insurance products
And… application of proportionality in practice
non-traditional mass distribution channels => new entities in the value chain
Question of licensing /formalising distributors
Assumption that insurer is the strongest party in the value chain is no longer guaranteed (e.g. large MNOs)
CP challenges: at the same time distributors are often outside insurance regulators‘ authority
=> Need to cooperate and coordinate with non-insurance regulators

9. Thanks for your attention!
Thanks for your attention! . 9

10. What are your regional perspectives on these global challenges?