CAIRO, Aug 16 (MENA) — The Insurers Federation of Egypt (IFE) said “nature bonds” are reshaping the relationship between finance and risk management, as protecting natural capital and biodiversity becomes an increasingly important part of the global economic and financial system.
In a statement on Sunday, the federation said the shift presents an opportunity for Egypt’s insurance market to capitalize on growing interest in nature-related finance, develop innovative insurance products and strengthen its ability to assess and manage nature-related risks.
Building nature-finance market:
IFE called on insurers to explore investment opportunities in nature finance and biodiversity-related financing instruments, while developing insurance products and solutions that can help protect natural assets and manage associated risks.
It said the approach would also support Egypt Vision 2030, strengthen the resilience and competitiveness of the Egyptian insurance market and enhance its regional and international position.
National nature-risk database:
The federation stressed the need to establish and develop a national database for environmental and nature-related risks in Egypt.
Such a database would support risk assessment, pricing and management, while stronger cooperation with the Financial Regulatory Authority would help develop sustainable finance instruments and encourage innovation in the sector.
Bringing biodiversity into risk frameworks:
IFE also called for biodiversity-loss and nature-related risks to be incorporated into insurers’ risk-management and governance frameworks.
It highlighted the importance of closer cooperation between the insurance sector, environmental authorities and international financial and development institutions to benefit from international expertise and best practices.
Preparing for nature-linked finance:
The federation also stressed the need to develop specialized actuarial and technical expertise in nature and biodiversity risks and sustainable finance.
It called for studying the potential development and issuance of nature-linked financing and insurance instruments in the Egyptian market, with the aim of mobilizing investment toward natural-capital protection and sustainable development. (MENA)
MARWAZEIN/