THE Insurance and Pensions Commission (Ipec) says Zimbabwe should explore innovative solutions to help mitigate the impact of climate change-related risks and build resilience against its associated disasters.
This comes as Zimbabwe is currently battling an El Nino drought, which has affected the southern Africa region. Zimbabwe has declared the drought a state of disaster.
At a workshop titled, Climate Resilience Through Sustainable Insurance, organised by Ipec in partnership with Financial Sector Deepening Africa on Tuesday, it was revealed that Zimbabwe needed a concrete insurance plan to deal with climate-related issues.
Ipec commissioner Grace Muradzikwa said traditional insurance models may not be sufficient anymore to address the scale and complexity of these risks.
“In the face of increasing climate-related risks and challenges, it is crucial for us to explore innovative solutions that can help mitigate the impact of these risks and build resilience in our country,” Muradzikwa said.
“As you know, insurance plays a critical role in providing financial protection against climate-related disasters. However, traditional insurance models may not be sufficient to address the scale and complexity of these risks. That is why it is essential for us to adopt sustainable insurance practices that not only provide coverage but also promote resilience and adaptation to climate change.”
The workshop delved into the various ways in which sustainable insurance can contribute to building climate resilience from incentivising risk reduction and prevention measures to promoting sustainable business practices and investments.
Muradzikwa said it was also important to explore the role of insurance in supporting vulnerable communities and enhancing their ability to cope with the impact of climate change.
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In 2021, Zimbabwe signed the Nairobi Declaration on Sustainable Insurance which outlines the commitment of member states to accelerate action on environmental challenges and sustainable development. This includes addressing climate change, air pollution, biodiversity laws and the transition to a circular economy.
The declaration also emphasised the need for greater international cooperation and partnerships to achieve these goals.
Muradzikwa said the Nairobi Declaration served as a roadmap for advancing the global environmental agenda in the following years, hence the current engagement with policymakers.
“So, what we’re here to do in these few days is working with Ipec, working with the Insurance Council of Zimbabwe, and working with the private sector to see how we can scale particularly agricultural insurance products within Zimbabwe,” Financial Sector Deepening Africa risk and resilience director Kelvin Massingham said.
He said they were doing this because they knew that Zimbabwe was a country that was highly exposed to climate change.
“As temperatures warm, you get extreme events that are occurring more and more like the drought that is currently happening, floods, tropical cyclones, and insurance provides a really critical solution in terms of delivering resilience to these climate shocks,” Massingham said.
“And so, we want to see how we can really get the private sector, private insurance industry in Zimbabwe to offer more solutions. And so, we’re working together with all these stakeholders to see what we can design to really scale up insurance for agricultural risks in Zimbabwe.”
