The African Risk Capacity (ARC) will make a US $10.7 million payout to the Government of Madagascar after recent severe tropical cyclone Batsirai triggered the coverage the country has from the parametric insurance risk pooling facility.
We believe this is the first parametric payout for tropical cyclone insurance coverage made by the African Risk Capacity (ARC), since it launched the cyclone product back in the second-half of 2020.
Madagascar was the first African nation to take up the sovereign parametric cyclone insurance protection, in late 2020 and the decision has proved to be a prudent one, as the countries cyclone policy was triggered by Batsirai.
ARC’s Tropical Cyclone model identified that over 6 million people were exposed to recent tropical cyclone Batsirai when it slammed into Madagascar.
According to reports from the Malagasy Disaster Management Agency (BNGRC), some 61,500 people were displaced by cyclone Batsirai, while 121 people lost their lives, and 19,000 homes and 4,500 classrooms were damaged by the severe storm.
Cyclone Batsirai caused significant impacts to Madagascar in February 2022 and was the strongest tropical cyclone to strike the country since Cyclone Enawo in 2017.
Batsirai made landfall as a Category 3 storm on February 5th 2022, with sustained winds of 165 kilometers (105 miles) per hour and gusts up to 230 kilometers (145 miles) per hour, only two weeks after cyclone Ana brought deadly flooding to the country in late January and killed 55 people.
ARC’s parametric triggers are designed to be quickly assessed when any qualifying catastrophe or weather event occurs and so it’s encouraging to learn that this US $10.7 million payout will be made very rapidly, to help the Government of Madagascar in delivering much-needed relief and recovery funding to affected areas of the country.
Madagascar had previously received a $2.3 million ARC payout after its parametric drought insurance policy was triggered a few years ago.
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