ESG guidance for insurance regulators in Ghana, Kenya and Nigeria

The significance of environmental, social and governance (ESG) factors in insurers' underwriting business and investment portfolios is increasingly under the spotlight. This is the result of growing awareness of climate-related risks and their potentially devastating effects on society. ESG considerations are specifically important in Africa given that many countries on the continent are highly vulnerable to climate-related risk. Drastic climate change has knock-on effects within African economies that impact poverty, food security and economic development.

African insurers typically do not yet fully consider ESG risks in underwriting, capital management and risk management decisions. This is largely driven by a lack of regulation, policy and voluntary initiatives to regulate and monitor ESG adoption by the insurance sector.

Financial Sector Deepening (FSD) Africa contracted Genesis Analytics to help co-create and implement proportional and fit-for-purpose ESG supervisory approaches and interventions in the insurance sectors in Ghana, Kenya and Nigeria. Our involvement built on the work already done by both FSD and the regulators in each country. This aimed to deepen the integration of ESG risks and create more robust insurance systems as part of FSD Africa’s Risk and Resilience initiative.

We took a joint-solutions approach, working closely with FSD Africa and the insurance regulators of Ghana, Kenya and Nigeria by:

1. Workshopping with regulators to gauge the current level of ESG consideration in each country.
2. Developing ESG toolkits by using global best practice and our regional expertise.
3. Providing ESG guidance notes for each regulator, informed by the specific gaps in each country and the toolkits we developed.
4. Holding capacity-building webinars to provide regulators with guidance and implementation strategies to embed ESG into the insurance sector.