The African Risk Capacity (ARC) Group is introducing a new insurance mechanism to help African countries address the devastating impacts of floods. This parametric insurance product provides countries with predictable and rapid funding for early response to flood-related disasters. The mechanism marks an important milestone in building the continent's resilience to climate-related disasters and complements ARC solutions.
Africa is experiencing a significant increase in the number of flood events, including in many large urban centers and coastal areas. These have resulted in numerous deaths, displaced millions of people, and caused significant property damage and billions of dollars of damage to agricultural land. Unfortunately, due to the effects of climate change, floods have become more frequent and intense in ARC member countries in recent decades. Member countries have expressed strong interest in developing and deploying flood insurance products to help countries respond to flood disasters in a timely manner. Although there are several regional and national flood early warning efforts, there is no functioning system for estimating economic losses that can support a national insurance system.
ARC has partnered with JBA Risk Management to develop a model that supports the delivery of practical, customizable parametric flood insurance products. The flood product generates daily flood analyses and calculates the relevant impacts for each country. These impacts are compared to parametric triggers (economic losses or number of people affected) and payments are calculated if flood impacts exceed trigger thresholds set by the country.
After the completion of validation workshops in each country, the flood model underwent a quality review process to assess its robustness and fitness for its intended purpose by a Technical Review Forum composed of senior national and international flood experts from world-renowned institutions. The experts concluded that ARC's flood risk model is considered sufficiently mature and robust and can be safely used to underwrite insurance policies.
The flood model is available in Madagascar, Mozambique, Malawi, Côte d'Ivoire, Ghana and Togo and will be expanded to other
countries in 2024.
The African Risk Capacity (ARC) Group consists of ARC Agency and ARC Insurance Company Limited (ARC Ltd). ARC Agency was established in 2012 as a specialized agency of the African Union to help member states improve their capacity to better plan, prepare and respond to weather-related disasters. ARC Ltd is a mutual insurance agency that provides risk transfer services to member states through risk pooling and access to reinsurance markets. ARC was established on the premise that investing in preparedness and early warning through innovative financing approaches is highly
cost-effective, saving up to $4 for every dollar invested up front. ARC, with the support of donor partner organizations, helps AU member states reduce the risk of loss and damage from extreme weather events affecting African populations by providing sovereign disaster risk insurance for timely, cost-effective, objective and appropriate response to natural hazards in a transparent manner. ARC is using its expertise to address some of the other serious threats facing the continent, including droughts,
tropical cyclones, disease outbreaks and epidemics, and now floods.
Aucun commentaire:
Enregistrer un commentaire