Wednesday, April 17, 2024
HomeAfricaCapacity for Managing Risks in Africa

Capacity for Managing Risks in Africa

African Risk Capacity Limited (ARC Ltd.), the parametric insurer and financial affiliate of the ARC Group, is celebrating its 10th anniversary. Established in 2014 with a unique mandate from the African Union Heads of States to provide insurance and risk transfer solutions to African countries, ARC Ltd. has been a pioneer in promoting climate resilience across the continent.

By providing rapid payouts to help governments respond to climate shocks, ARC Ltd. has disbursed over US$170 million in claims to assist vulnerable communities. Initially offering drought insurance only, the company now covers crops, livestock, floods, tropical cyclones, and health-related risks such as outbreaks and epidemics through its diversified product portfolio.

CEO Lesley Ndlovu remarks, “We believed that partnering with governments would be the most effective path to advance in disaster risk management and financing, and our success in signing up 39 member states in Africa has proven this strategy to be correct.”

In addition to government collaborations, ARC Ltd. has expanded its partnerships to include offering insurance to humanitarian agencies like the World Food Programme, Start Network, and the UN High Commission for Refugees to aid vulnerable populations. The company also engages in private sector partnerships through reinsurance to protect the incomes of small- to medium-scale farmers who are highly impacted by climate change.

Ndlovu further states, “The over US$170 million in claims we have paid out have directly benefited communities across Africa affected by natural disasters. We are encouraged by the increasing number of countries incorporating insurance into their disaster risk financing strategies, marking a shift towards proactive disaster risk management over the past decade.”

Central to ARC Ltd.’s activities is the development of innovative products and risk transfer solutions tailored to meet the evolving needs of individual countries. Ndlovu highlights the importance of addressing the rising severity and frequency of natural disasters by offering multiple financial instruments alongside insurance solutions.

Looking forward, ARC Ltd. aims to extend its coverage to all 55 African Union countries. Ndlovu emphasizes, “With an estimated 700 million people at risk due to climate change, our goal as an organization is to provide coverage to all who require it. This drives our work every day, as we strive to expand our impact and reach even more people.”


Most Popular