The African Risk Capacity (ARC), which provides parametric disaster insurance products for countries in Africa, is currently in a pilot phase with a new flood tool, that it hopes to roll-out more broadly next year.
At a conference in Dakar this week, executives from the African Risk Capacity (ARC) discussed progress and its plans to become a leader in disaster risk management in Africa, through its provision of parametric insurance, leveraging reinsurance markets and risk pooling alongside resilience measures.
Recently named Director-General (DG) of ARC Ibrahima Cheikh Diong and Lesley Ndlovu, the CEO of ARC Ltd (the insurance arm of the ARC Group) explained that ARC continues to plan new product launches, which ultimately can help to expand the range of parametric disaster insurance it can offer to African nations.
Among these is flood risk, which has been on the ARC roadmap for a time and is now in a pilot phase.
The flood tool is currently piloted in Côte d’Ivoire, Ghana, the Gambia and Togo and will be available for all Member States in 2021. The aim is to help countries better understand their flood risk, but ultimately this could lead to the launch of a parametric flood insurance product, we believe.
In addition, ARC is also continuing its work on epidemic and pandemic risks, and alongside the Africa Centre for Disease Control and Prevention (Africa CDC) has delivered COVID-19 modeling tools for Africa to enable Member States in managing the pandemic and assisting the populations who need it most.
The continued plans for expansion of the services offered and as a result, longer-term, the ARC risk pool, will in future demand greater amounts of reinsurance capital, in order to keep the parametric disaster insurance products as cost-efficient as possible for ARC member nations.
“Since 2014 onwards, 62 insurance policies have been signed by Member States representing US$101.7 million in premiums paid for a cumulative insurance coverage of US$722 million for the protection of 72 million vulnerable people in participating countries,” according to Ndlovu, CEO of ARC Ltd.