UNDP and Milliman Lead Actuarial Innovation in Insurance Sector

March 26, 2024
Photo: shutterstock/UNDP Viet Nam

On March 26, 2024, the United Nations Development Programme (UNDP), in collaboration with Milliman Inc., held a workshop spotlighting the crucial role of actuaries in insurance development. The event underscored the importance of integrating actuarial expertise and risk management into strategies for combating Natural Catastrophes (NatCat), urging a strategic bolstering of actuarial capabilities within Viet Nam.

This workshop is a critical component of the broader UNDP-Milliman Global Actuarial Initiative (GAIN), unveiled at the 77th United Nations General Assembly. With Milliman committing to donate US$1-2 million annually in pro bono services until 2025 for interventions in 24 countries, Viet Nam emerges as a primary beneficiary in this global endeavor to elevate risk management capacities across insurers, pension funds, and social security bodies, thereby enabling the provision of innovative and accessible insurance solutions for all demographics.

Amidst the ongoing challenges of the COVID-19 pandemic and the triple threat of climate change, biodiversity loss, and plastic pollution, Viet Nam stands at a crossroads. Recognized as one of the country's most vulnerable to climate impacts, with over 50 million residents in rural locales, the nation grapples with escalating risks that threaten its disaster response capabilities and Sustainable Development Goals (SDGs) achievements.

Despite decades of growth, Vietnam's insurance market penetration lingers at a mere 2.3% - 2.8%, trailing behind its emerging market counterparts and significantly below the 9.6% seen in developed economies. This gap highlights the pressing need for straightforward, accessible financial risk management strategies to shield the untapped, vulnerable market from the nation's risk landscape.

Patrick Haverman, Deputy Resident Representative of UNDP Viet Nam, emphasized, "Risk management is essential in mitigating disaster risks, enhancing resilience, and adapting to climate change. Insurance and risk financing are vital safeguards for assets, lives, and livelihoods amid crises."

"UNDP Viet Nam takes pride in our collaborations with the Ministry of Finance (MOF), Ministry of Agriculture and Rural Development (MARD), the Insurance Association of Viet Nam, and the private sector. Together, we strive for a clear, action-focused strategy that meets current needs while bolstering our collective response capabilities," he added. Through its Insurance and Risk Finance Facility, UNDP partners with industries and governments across 29 countries to forge essential insurance and risk finance solutions, laying the groundwork for policies, strategies, and studies that address today's challenges.

"Creating scalable, affordable insurance and risk financing solutions for climate-induced shocks is not only possible but imperative. When insurers and institutions are prepared for risks, we can ensure inclusivity and leave no one behind," he stated.

This initiative marks a crucial advancement in enhancing Vietnam's insurance sector's resilience amidst growing environmental challenges. By joining forces, UNDP, Milliman, and local stakeholders are determined to cultivate a robust, sustainable actuarial profession, aligning with Vietnam's development objectives and contributing to the global quest to achieve the SDGs.

The workshop welcomed CEOs including key players like the Military Insurance Corporation, Vietinbank Insurance Corporation, and MSIG Insurance Corporation (A Japan – Vietnamese Joint Venture), and senior leaders from 23 life and non-life insurance enterprises, alongside representatives from the Insurance Association of Viet Nam, the Insurance Supervisory Authority, and the Viet Nam Insurance Development Institute.