Global insurance broker Willis Group Holdings has chartered $55 million of reinsurance capacity for the first-ever insurance pool for weather-related crises in Africa. Africa Risk Capacity Insurance Company Ltd (ARC Ltd) is aimed at reducing the need for foreign aid and helping communities recover quickly from such natural phenomena as droughts.
ARC will initially offer policies Kenya, Mauritania, Mozambique, Niger, and Senegal. The program has been designed such that droughts can be quickly spotted and assistance delivered swiftly.
“The underlying insurance policies issued by ARC Limited are cutting-edge index-based coverages, with parametric triggers tailored to reflect each country’s specific rainfall requirements for growing staple crops,” said Managing Director of Analyrics at Willis Re, David Simmons, in a press release.
“The calculation of claims to the programme is based upon satellite rainfall data which is used to objectively determine whether a drought has occurred. This then allows claims to be calculated quickly, and as a result, funds can be deployed in a timely and efficient manner.”
Many hope that ARC will help African communities be more empowered in the aftermath of climactic events and disasters.
