The United Nations Development Programme (UNDP) in the Maldives and Maldives Monetary Authority (MMA) held a validation session for an insurance sector diagnostic study jointly developed by the two organizations. The technical support to this study was provided by UNDP’s global Insurance Risk Finance Facility (IRFF). The purpose of this exercise is to conduct a comprehensive gap analysis of the Maldivian insurance market and identify future areas of broader support for developing inclusive insurance solutions in the Maldives.
The findings of the study are expected to identify how inclusive insurance products can be mainstreamed across a number of industries such as tourism, agriculture and fisheries, and to identify foundational steps needed to roll out innovative risk transfer solutions to preserve Maldives’ rich biodiversity and the livelihoods which depend on them. Further, the study is also expected to provide recommendations on national insurance market development, strengthening legal and administrative frameworks and on areas for capacity building to develop the market.
The validation session saw partners – such as government ministries, banks, financial institutions, NGO’s, tourism, and private sector partners and leading insurance providers – come together to validate the insurance sector diagnostic study.
On the margins of the validation session, the two organizations further reaffirmed their commitment to develop the insurance sector by signing a Statement of Intent to explore joint opportunities following the recommendations of the insurance diagnostic study. Signing of behalf of UNDP in the Maldives was Resident Representative Enrico Gaveglia, and the MMA was represented by Governor Ali Hashim.
The Statement of Intent reaffirms the long-standing partnership between the two entities, building on several areas of support through the decades – including the development initiatives and endeavours to provide the government with long-term support that systematically links up the public policy and financing, and lays the foundation for accelerated and focused development cooperation under UNDP’s Country Programme Document for the Maldives 2022-2026.
A first Letter of Intent between UNDP Maldives and MMA was signed on 11 May 2022, to collaborate on the development of an insurance diagnostic study, leading to the successful development of the insurance sector diagnostic report in a highly consultative process, reflecting the insights collected from insurers, government and private sector entities.
The second letter of intent signed today between both organizations will further explore joint opportunities for developing detailed project proposals to design follow-up insurance interventions based on the recommendations of the Insurance Sector Diagnostic Study.
Signing the Statement of Intent on behalf of MMA, Governor Ali Hashim affirmed that, “the MMA is committed to realizing its obligation to strengthen policies and governance mechanisms to accelerate resilience building in the country”. Furthermore, Governor stated that the MMA “will continue to work together and deliver a stronger, more sustainable future”.
With the signing of the Statement of Intent, UNDP’s support to MMA will be enhanced by bringing together its extensive global and regional expertise in developing data-driven, innovative research capabilities. UNDP will partner with MMA to develop similar capacities and seek additional partnerships for strengthening knowledge exchange.
“Less than 5% of losses due to disasters are covered by insurance in the Maldives, as compared to a 50% in high-income countries, meaning that when disaster strikes, people lose their homes, jobs, food sources, and face increased expenses such as in healthcare. There is no compensation and no chance to rebuild their lives. Closing this “protection gap” would help ensure that hard won progress is truly sustainable in the long run,” said Enrico Gaveglia, UNDP Maldives Resident Representative, speaking at the signing ceremony.
This collaboration between UNDP and MMA will establish a value-added joint effort in enhancing the parallel implementation of the Maldives development agenda and the Sustainable Development Goals.