UNDP, MMA exchange agreement on Monday. (Photo/UNDP)

MMA, UNDP to boost Maldives insurance sector

The project focuses on two critical aspects: insurance regulation and insurance operations.

22 August 2023

The United Nations Development Programme (UNDP) in the Maldives and the Maldives Monetary Authority (MMA) on Monday officially initiated their partnership by signing a financing agreement for the Maldives Insurance Development Project.

This joint endeavour between UNDP and MMA is designed to enhance the capacity of the insurance industry in the Maldives, focusing on two critical aspects: insurance regulation and insurance operations.

The project's framework draws on the findings of the Insurance Sector Diagnostic Study, which was completed in January 2023 with support from UNDP's Insurance and Risk Financing Facility (IRFF). Aligned with the Integrated National Financing Framework (INFF) of the Maldives, the initiative aims to strengthen the nation's insurance industry by bolstering regulatory measures and operational capabilities.

The primary objectives of the Maldives Insurance Development Project include enhancing the actuarial and operational capabilities within the country's insurance sector. It also seeks to evaluate the feasibility of nature-based insurance products and formulate essential regulations that align with evolving industry dynamics.

"Through this strategic partnership, we envision a transformative journey for the insurance industry in the Maldives. By strengthening the regulatory framework and enhancing operational capabilities, we are not only fortifying stability in our financial landscape, but also fostering resilience against the unique challenges inherent in our environment," MMA governor Ali Hashim was quoted in a press release as saying.

The Integrated National Financing Framework (INFF) of the Maldives outlines nine specific practical actions aimed at the development of the insurance sector. The Maldives Insurance Development Project serves as a pivotal step towards fulfilling these commitments. Among these actions is the acceleration of services vital for the country's well-being, including green, blue, and climate insurance products.

Enrico Gaveglia, UNDP Resident Representative in the Maldives, highlighted the project's relevance in the context of climate change's growing impact. Gaveglia emphasised the importance of protecting the Maldives' natural and physical assets in the face of climate-related vulnerabilities. He emphasised that insurance, as an adaptable measure, can act as an effective financial tool to safeguard communities and investments against the economic costs of climate change.

"This partnership with MMA is a groundbreaking step in our collaborative work on insurance in the Maldives. It sets the stage for future collaborations in the insurance sector, aligned with a broader vision of sustainable development," Gaveglia said.