To sustain Foreign Investments (FIS) into national and regional economies that have been impacted negatively since the Covid-19 pandemic era, robust risk management plan has been recommended.
Ken Aghoghovbia, deputy managing director/ COO, Africa Reinsurance Corporation (Africa Re) made the recommendation at the Annual Investment Meeting (Digital 2020 Conference) held in Dubai.
Aghoghovbia in his presentation titled ‘Re-insuring Investment During and Post Covid-19’ said many countries have achieved accelerated economic development with a boost from foreign investments.
He noted that sadly, the contribution of these investments to national and regional economies have been adversely impacted by the Covid-19 Pandemic, resulting in massive unemployment, a significant drop in GDP growth rates and a generally reduced level of economic activity.
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Aghoghovbia pointed that, at times like these all parties must come out with a robust risk management plan, which basically involves identifying all the risks associated with an investment and making a decision on how to mitigate them.
“The plan could be to avoid, accept, limit or transfer the risks.”
He stressed that Insurance and Reinsurance are risk transfer mechanisms that helps an investor transfer all the risk identified in executing a project to the insurer, who in turn transfers all or part of the risks assumed to the reinsurer, thereby enabling the risk managers to fully de-risk investments.
According to him, since the outbreak of Covid-19, insurers and reinsurers have been actively playing their risk mitigation role in settling the pandemic related claims, estimated to eventually reach $100 billion.
“Insurance and reinsurers are also providing new covers for emerging risks to help businesses and economies recover. In order to boost passengers’ confidence in flying at this time insurance policies have been provided for airlines to cover passengers Covid-19 related expenses. Similarly, some countries, like the Dominican Republic, in pursuit of a tourism recovery plan, are now offering free travel insurance covers to foreign visitors.”
“With appropriate reinsurance policies, uncertainty is taken out of all phases in the execution of projects and even the heightened cyber risks concerns can adequately be mitigated, Aghoghovbia noted.
He however assured that Africa Re is ready to design for you, viable risk transfer solutions capable of withstanding all risk scenarios and creating a more resilient business landscape across borders.
