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Insurance industry a key partner for government
The insurance sector is helping to expand the level of financial protection and to enhance social welfare provision.
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Rapid urbanization has reduced people’s ability to depend on traditional extended family support networks. (Shutterstock/File)
T
he insurance industry has long been an important financial partner to governments. As with healthcare, retirement costs can be a huge contingent fiscal liability for the public sector balance sheet. The life insurance industry helps and encourages households to take ownership of their retirement plans in a timely manner through regular savings.
The insurance sector is helping to expand the level of financial protection and to enhance social welfare provision, including by opening up thousands of jobs, but the challenge remains considerable. The development of the insurance industry also is accelerating financial and capital market reform and providing the long-term investment needed to finance the next stage of economic development.
The investment of long-term insurance funds contributes directly to economic development and growth through expanding capital markets, financing infrastructure schemes and investing in commercial enterprises.
Hence, the life insurance industry plays an extremely important and highly responsible role in the social and economic development of the country. Life insurance provides a source of long-term capital which potentially becomes funding in infrastructure development. Life insurance liabilities are long-term and this corresponds well with the investment needs of large-scale infrastructure financing.
