The Financial Solutions for the Sustainable Development Goals meeting took place on Monday 10 October 2016 at the UN Headquarters, New York, USA. The meeting was attended by Sabbir Patel, Senior Vice-President, Emerging Markets and Microinsurance, the International Cooperative and Mutual Insurance Federation (ICMIF).
The aim of the meeting was to identify and support the piloting of financial solutions and financial sector transformation that can drive private investment as well as turn innovative initiatives and ideas into strong, actionable and well thought-out SDG interventions.
In his keynote address the Secretary-General said, “This global initiative can support the identification and piloting of innovative finance instruments that can drive investment and support well thought-out SDG interventions.”
“As well as launching innovative financing solutions,” he added, “the Platform would engage key Development actors, including Governments, civil society, philanthropic organizations, entrepreneurs, institutional investors, banks, project developers and development finance institutions.”
Mr. Ban said, “I hope the proposed Financial Innovation Platform will provide the best possible know-how to support the incoming Secretary-General as we work to scale up our efforts and ambition.” The focus of the platform will be on actions and on SDG interventions, with the goal of ensuring that it will provide financing to the places and people who need them the most.
ICMIF is one of the partners involved in this platform and Sabbir Patel was able to tell participants about ICMIF’s innovative 5-5-5 Mutual Microinsurance Strategy which aims to extend mutual microinsurance to five million low-income households over five years in five countries (India, The Philippines, Kenya, Sri Lanka and Colombia), potentially protecting an extra 25 million poor and currently underserved people.
Patel took part in the panel discussing Financial Inclusion & Access to Basic Services which looked at how the program might increase the reach and penetration of inclusive financial services, and how improving access to basic services – such as water, sanitation, healthcare, energy, and housing – is a key part of the 2030 agenda. The panel discussion highlighted how creating market-based financial initiatives will play an important role in expanding access to such services in underserved regions and communities thus furthering the goals of the SDGs.
Patel told delegates that the 5-5-5 Strategy would build on ICMIF’s fifty years’ experience in developing insurance solutions for underserved and excluded communities, saying that the Strategy will connect the resources and know-how of the developed mutual insurance sector with the drive, determination and experience of those on the ground, and it will empower people to take control of their lives and have confidence in the future. Patel explained his belief that the 5-5-5 Strategy spans across most, if not all, of the SDGs.
SDG One – Ending Poverty
In his opening remarks before the panel discussion Patel said: “Insurance is already recognized as a key tool for sustainable poverty alleviation and for ensuring low-income people have a safety net to prevent them falling back into poverty. However, simply providing insurance is not going to have the required full impact on livelihoods”. Patel continued: “There have been many cases of mass microinsurance schemes reaching a great number of the poor but with little attention paid on serving the community’s needs or investing into the required local infrastructure. As a result, many are left covered with products which have little meaning and little impact, they also lack the ability or knowledge how to make a claim. Microinsurance requires proximity to the community in order to understand their needs and deliver relevant and timely products, it requires substantial investment in education and infrastructure so that claims can be administered quickly and people actually feel protected. Through the 5-5-5 Program we are replicating and expanding tried and tested programs which are giving real impact on the ground”.
SDG Two - Food Security
Patel told the meeting that the 5-5-5 Strategy will help to ensure food security through the delivery of insurance protection to smallholder farmers,” he said. “This will include not only protection of crops and livestock but also protection of the farmer’s household against illness, death and disability. In Kenya, the 5-5-5 Project is working with a local ICMIF member, TIA, which has piloted an innovative Index-Based Livestock product. Livestock in pastoral areas depend heavily on forage, and drought is the cause of 80% of all losses suffered. With the Index-Based Livestock product, satellites indicate where severe forage scarcity is and policyholders are paid accordingly. The 5-5-5 Program will look at expanding this product but also delivering insurance solutions for the farmers themselves and introducing climate risk minimization strategies,” Patel concluded.
SDG Three – Ensure Healthy Lives
Patel explained that the provision of health insurance is critical to lowering the financial impact of illness on the poor, however, without a focus on health prevention and access to quality healthcare the potential impact of such insurance schemes is greatly reduced.
Patel cited an example of a project being run by ICMIF member Uplift Mutuals, India, as part of the 5-5-5 Strategy which will focus on delivering an entirely community-owned, health mutual aid programme which will provide access to quality preventive and promotive healthcare services at affordable rates.
SDG Five: Achieve gender equality and empower all women and girls
In low-income communities the concept of insurance resonates much better with women due to their understanding of risk and their concern for children’s long term livelihoods. The mutual insurance approach goes beyond simply providing the women with protection against death of the breadwinner or the illness of a child. As a policyholder of a mutual insurance provider, women also participate in the running of the scheme and they are empowered to make decisions that will affect their livelihoods. As members they are provided training and opportunities to work in and lead these organizations. The community approach gives them a feeling of belonging, dignity and social support as well as equal rights through democratic governance.
The 5-5-5 Project in the Philippines is designed to strengthen the capacity and outreach of mutual benefit associations (MBAs) who are serving the poor. Most of these MBAs are led by women and their policyholders are majority women, CARD MBA, the most successful of these has 3 million members of which 98% are women. These women provide both the workforce and governance of the organization.
SDG 13: Take urgent action to combat climate change and its impacts
Climate-linked insurance products are an important tool for recovery during climate-related catastrophes Patel told delegates but also emphasised how the approach of the 5-5-5 Strategy enables low-income communities to first have their basic protection needs covered thus enabling them to be more resilient at a time of a disaster. In the Philippines, established MBAs are now introducing a Packaged Assistance In case of Disaster Plan (PAID Plan) to their members, which is a three-in-one package that covers funeral expenses, accident cover and residential house reconstruction. The MBAs, with their local networks based within communities, have proved to be the first to respond and the first to pay in times of disaster. The new policyholders acquired under the 5-5-5 Strategy will have access to the PAID Plan product.
The biggest challenge for a mutual microinsurer when disasters hit, Patel says, is having the capacity to pay a high volume of claims in a short period of time. Access to reinsurance, even when available, is limited and unaffordable, under the 5-5-5 Project ICMIF intends to explore localized pooling options and facilitate reinsurance arrangements with its larger member organizations so that losses from such disasters are more easily absorbed. “This is yet another innovative finance instrument from the mutual insurance sector that can help support the SDG interventions,” said Patel.
To conclude, Patel told the assembled participants, “The 17 SDGs are designed to make our world more prosperous, inclusive, sustainable and resilient, the cooperative and mutual movement has always supported these goals and we look forward to advancing these through this new platform created by the United Nations”.
|