Kganyago calls for emerging markets, developing countries to address insurance protection gap

JOHANNESBURG – South African Reserve Bank (SARB) governor Lesetja Kganyago has called for emerging market and developing economies to urgently address the widening insurance protection gap in the face of growing natural disasters.

The calls from Kganyago and other central bank governors come amid an alarming increase in natural catastrophes, including hurricanes, typhoons, wildfires, and floods across the world.

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South Africa is among countries recently devastated by deadly floods, with more than 400 lives lost in KwaZulu-Natal in 2022 and 100 lives claimed in June’s floods in the Eastern Cape.

Climate action, financing, and insurance gaps are on the agenda at the G20 finance track meetings currently underway in KZN on Friday.

Kganyago addressed some delegates on the matter on the sidelines.

“For central banks, policymakers, and supervisors, bridging this protection gap is part of building macro financial resilience.”

President of the World Bank Group Ajay Banga said the cost of uninsured losses in natural disasters ends up on the public balance sheet as debt.

“Insurance can help but for insurance to work, high quality development is a necessary precondition. It simply cannot function in the face of poor infrastructure, unreliable data or chronic underinvestment. Without that foundation, insurance premiums would just be too expensive.”

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