"Insurance against natural disasters, a national priority" - Ibrahimaj: Long-term policies and stronger financial mechanisms to cope with damages
Through long-term policies, we can guarantee better protection against natural disasters. This is what the Minister of Economy and Innovation, Delina Ibrahimaj, said at the International Forum on Natural Disaster Risk Management and Effective Insurance and Reinsurance Models for Their Coverage, organized by the Financial Supervisory Authority (AMF) in cooperation with the Insurers Association of Albania and AON Reinsurance.
According to her, the proper drafting and approval of legislation for mandatory flood and earthquake insurance is essential.
"We should not focus only on short-term or medium-term policies. Governments must build long-term policies that guarantee economic stability, fiscal security and sustainability for the country. Albania, according to World Bank estimates, remains among the countries with the highest exposure to natural disasters in Europe, about 86% of the territory and over 88% of the population are exposed to these risks and the lesson we learned during the 2019 earthquake was that we must take care, in order to guarantee that mechanisms are in place, since the cost of the earthquake was extremely higher ," said the Minister.
Meanwhile, the Executive Director of the Financial Supervisory Authority, Adela Xhemali, stated that to increase property insurance against fire and other disasters, higher awareness and more affordable products are needed.
"Insurance should not be considered simply as another financial product, it should be considered as an investment, a mechanism of trust, a promise, of recovery, of renewal, a pillar of sustainability. To reduce this systemic vulnerability we need a higher level of insurance enterprise, broader awareness, more solid distribution channels, products that citizens understand, can trust and most importantly, can afford," said Xhemali.
On the other hand, Milva Ekonomi emphasized that the country relies on budget reallocations when it comes to covering damages from natural disasters.
"We must admit that financial mechanisms are still unprepared to cope with disasters and remain very limited. In many cases, the country mainly relies on budget reallocations, borrowing or donor assistance when disasters occur, therefore strengthening the insurance culture and expanding coverage against natural disasters can be considered a national priority," said the Chairwoman of the Parliamentary Committee on Economy, Employment and Finance.
The Forum discusses international best practices for managing and transferring risk from natural disasters, the use of risk models, and the development of sustainable insurance and reinsurance mechanisms.
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