ARC gets Dutch Gov support to make parametric insurance more accessible in Africa
African Risk Capacity Limited (ARC Ltd.), the financial affiliate and parametric insurance underwriting entity of the African Risk Capacity (ARC) Group, has received a $27 million contribution from the Dutch government to help in boosting climate resilience in Africa.
The Netherlands has now become the sixth contributor to the African Development Bank’s Africa Disaster Risk Financing Programme (ADRiFi) Multi-Donor Trust Fund, through which the funding will be channelled to ARC.
The additional funding is expected to support the promotion of parametric insurance and other climate risk management instruments in Africa, ARC explained.
Lesley Ndlovu of ARC Ltd. explained, “We are grateful for the generosity of the Netherlands, and we welcome the country as a new donor to the ADRiFi programme to help reduce the protection gap and assist us in making parametric insurance more accessible and affordable through premium support.”
Parametric insurance is seen as a critical tool in the fight against climate change in Africa, as well as other regions of the world.
The responsive nature of parametric triggers and risk transfer structured to use them means payouts can be made more rapidly and without lengthy claims processes.
ARC highlighted that, “The swift response facilitated by parametric insurance is essential for mitigating the socioeconomic impacts of natural disasters, particularly among the most vulnerable communities.”
The ADRiFi partnership was established in 2019 to increase insurance coverage across Africa and enhance the continent’s resilience to climate shocks, with over six million individuals protected since its inception.
“The ADRiFi programme continues to play a pivotal role in advancing the uptake of this innovative mechanism. At the same time, this collective effort underscores the global commitment to safeguard African nations from the escalating impacts of climate change,” ARC said today.
ARC continues to refine its risk models and link their output to resilience preparations countries make, to integrate the ability to recover from disaster with its parametric insurance products, helping to prepare and enhance the ability for countries to recover when severe weather and climate disasters strike.
