Climate Change, Sustainability and the Promise of Inclusive Insurance

As the dire consequences of climate change become increasingly apparent, the global insurance industry is stepping up to play its part in mitigating the crisis. Room member and Group CEO of APA Apollo, Ashok Shah, is well aware of the critical role insurance companies have to play in these times. He lets us in on how he’s shaping a more sustainable future in East Africa.

As a seasoned insurance professional, what do you love most about your career?

I love the promise that insurance brings. In my opinion, this work is about protecting lives and providing benefits, and I believe insurance has the ability to change lives for the better. I also feel truly blessed by the people I work with and serve. I have been working for many years with some incredibly talented colleagues, and I’m constantly amazed at how young talent, properly nurtured, can help achieve our objectives much faster and with alacrity.

One of the most important things that I have learnt over my career is to listen, to slow down and have empathy. You can find great ideas and avoid future problems by listening to what people are saying. Not all claims are payable, but when you listen to the circumstances, you get to understand people’s dilemmas and can help them seek a solution. In the workplace, we are dismayed when someone misses a deadline, but we should be thinking about the other situations they may be in. Listening and empathy will take you a long way.

APA Apollo describes itself as a champion for the environment. Why are environmental issues so important to the company?

Being a responsible company is fundamental to our long-term sustainability. After all, insurance is all about sustainability.

At the Apollo Group, corporate social responsibility is an integral part of how we do business. Being a responsible company is fundamental to our long-term sustainability. After all, insurance is all about sustainability. We are committed to creating sustainable value for our shareholders, customers, employees and the communities in which we live and work.

Over the next decade, climate change will be the biggest environmental problem that humanity will face, and currently, the Kenyan economy is highly dependent on its natural resources base — more than 50% of the region’s GDP comes from agriculture, forestry, and fishing. Over the past year alone, climate change has brought about severe water shortages in many parts of the region as well as rampant flooding. Meanwhile, domestic and industrial pollution, ongoing deforestation, soil erosion, desertification and poaching have further depleted our resources. As a result, the livelihoods of more people today than ever before are likely to be threatened due to some unforeseen resource depletion. We demonstrate our commitment to help mitigate these risks by dedicating both time and money to support communities around us through a wide number of initiatives.

In recognition of its agriculture insurance products, APA received the European Microfinance award in 2019, being the first insurance company to do so. What did that achievement mean to you?

Inclusive insurance has an essential role to play in strengthening the resilience of vulnerable communities to the effects of climate change, especially those relying on agriculture, forestry or livestock.

We were extremely honoured to receive such an important award and were very grateful for the acclamation we received for our work in Kenya. The theme that year was “Strengthening Resilience to Climate Change” and the recognition couldn’t have been timelier. In recent years, extreme events — including drought, flooding, storms, fluctuating temperatures and other climatic changes — have been occurring with greater frequency and intensity, increasing risks to health, livelihoods, food security, water supply, economic growth and human rights. It is the poor who feel the impacts of this the most, so we were grateful for the opportunity to bring awareness to their plight and share our solutions.

In the past several years, we have provided cover for the crops and animals of over 500,000 smallholder farmers and pastoralists. The livestock cover is unique, in that it provides for lack of forage on the ground. Through satellite imagery, when we see the forage below a certain level, we announce a payout. The amount is sent directly to the pastoralist through mobile money so they can then purchase feed to fend for the animal until the next rainy season.

The award illustrates that inclusive insurance has an essential role to play in strengthening the resilience of vulnerable communities to the effects of climate change, especially those relying on agriculture, forestry or livestock.

Though APA Apollo does notable CSR work in sports and education, its main focus is increasing access to clean water. Why was that cause chosen above others?

Access to clean water means education, income and health.

The majority of Kenyans live in rural areas, many of which are in arid and semi-arid regions of the country. In most households, women and children spend hours every day walking to fetch water for their families. Not only does walking for water keep children out of school or take up time that mothers could be using for essential house and farm work, but the water collected from rivers has many effluents and often carries diseases that can make them ill. Access to clean water means education, income and health, and it ensures that the community at large is able to participate in other productive activities.

Our Foundation’s water projects involve environment conservation and water harvesting through the construction of sand dams, water tanks and shallow wells. Since 2006, the Foundation has constructed 28 dams in various counties in Kenya with a total value of Ksh 140 million (approx. USD $1.3 million).

How has the pandemic affected your clean water efforts?

The implementation of new sand dam projects was interrupted by the pandemic, with protracted lockdowns and travel restrictions slowing down some of our activities. However, in November 2020 when restrictions were eased, we partnered with the community and the Utooni Development Organization to build two sand dams that support the residents of three rural areas in Kenya. Over 10,000 families now have access to safe water, better hygiene and improved sanitation. Our first sand dam of 2021 will be built in July.

For some companies, CSR is just about compliance. How is APA Apollo changing perceptions about CSR and using it as an avenue to make a lasting impact?

One of the core principles of the APA Apollo Foundation is to play an impactful role in connecting people and communities. As a result, we take relationships with the local communities that we serve very seriously and see it as essential to the growth of the business. The Foundation is also guided by the belief that every life has equal value, so it works to uplift the standards of communities and support people to lead healthy, productive lives. It is ingrained in all staff members that CSR is important to the brand, so everyone is encouraged to participate in our key CSR pillars, including sustainable clean water supply, youth empowerment, education and health, and environmental conservation.

Since its inception, the Foundation has successfully planted over 100,000 trees and impacted the lives of over 1 million Kenyans, which I think is a wonderful achievement.

The insurance industry is generally precautionary, but when it comes to climate change, a lot of the damage has already been done. How can we manage the effects of our actions now and prevent further damage?

Actively tackling climate change as a risk and opportunity is a strategic priority for us, and we know it is high on the agenda for our customers too. Climate change is consistently rated as a top issue for risk managers and business owners in the World Economic Forum’s Global Risks Report. In the 2020 edition, the top 5 most likely risks to impact businesses in the next decade were all environmental. It is a global risk, impacting all industries and regions and potentially, most of the world’s population.

We are constantly working to reduce our carbon footprint and continuously seek opportunities to reduce energy and water use, waste, commuter/business travel and paper consumption. We also consider the environment when designing products and services. It was a relief to hear that the proposed coal-fired power station in Lamu has been stopped, with insurers and reinsurers having given notice that they would stop insuring it. Actions such as this go a long way in preventing further damage.

If you were to give a prophetic title to the rest of the year, what would it be?

Facing challenges head on and winning!