The Financial Regulatory Authority (FRA) is seeking to launch insurance products, to support carbon certification and sustainable agriculture, according to its chairman, Dr Mohamed Farid. Work is currently underway with the Federation of Egyptian Insurance Companies (FEIC) to study ways to launch a carbon credit insurance policy.
In a speech at a carbon certification forum, Dr Farid stressed the importance of supporting farmers and encouraging them to adopt sustainable agricultural practices through the issuance of carbon certifications, according to local media reports.
He explained that an insurance product must be in place to guarantee the issuance of carbon certificates within a year and a half or two, ensuring that there are buyers for these certificates even before they are issued.
He said that cooperation is underway with the FEIC to establish a framework that allows the issuance of these documents, in addition to establishing strict rules to ensure the reliability of certification companies, thus ensuring the quality and reliability of the carbon certificates issued.
Data
Dr Farid also emphasised that the availability of accurate data is the cornerstone of launching new insurance products and that no insurance product can be developed without a thorough actuarial study, which requires detailed data on temperature and humidity, and their daily changes over the years.
He revealed that the Authority will work with the FEIC to develop a strategic plan for utilising this data, noting that the goal is not only to secure carbon certificates but also to provide insurance coverage for crops against risks such as heat waves.
He said that the Authority is also currently working on regulations for inspection teams that will visit farms to measure carbon levels, in cooperation with relevant market stakeholders.