Kganyago warns of growing global insurance gap
Reserve Bank Governor, Lesetja Kganyago says the rising cost of natural disasters, exacerbated by a lack of insurance cover, is fast becoming a global problem.
"Globally, it is estimated that over half of natural disaster losses remain uninsured. In EMDs, that figure often exceeds 70%. South Africa, for example, is estimated at 71%. This leaves households, businesses, and governments dangerously exposed."
Kganyago was addressing delegates at a meeting of G20 finance chiefs in Durban on Thursday.
The session on the global insurance protection gap drew attention to the impact of natural catastrophes such as hurricanes, typhoons, wildfires and floods.
Kganyago says insurance can play a role in managing the financial impact of these disasters.
"When governments must step in with emergency funds or debt finance reconstruction, it places additional strain on already limited fiscal space. It calls for stronger risk-sharing mechanisms, improved data and modeling of climate-related risks and innovative insurance solutions."
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