ARC and Floodbase will help to close the insurance gap with parametric flood microinsurance products that can be scaled across Africa to cover smallholder farmers against agricultural risk.
Floods have had a severe humanitarian impact in Africa in recent decades, attributed to climate change, rapid urbanisation, and overpopulation.
Furthermore, flood risk in Africa is largely uninsured, leading to economic frailty, agricultural instability and community displacement as a result.
However, different to indemnity insurance, these products can pay out within days or weeks when the magnitude of flooding exceeds a predetermined threshold. They will be designed with prearranged pricing and payout thresholds based on Floodbase’s 23 years of studies.
The combination of ARC’s region-specific specialisation and distribution network with Floodbase’s unmatched flood data and expertise will significantly mitigate the impact of flooding, insure previously uninsurable flood risk, and foster resilience across the African continent.
“Since its inception in 2014, ARC has shown that the parametric insurance model works and is impactful. We’re excited to partner with Floodbase to complement our portfolio of innovative parametric solutions to support flood-vulnerable communities across Africa to help them quickly rebuild and recover following destructive flood events,” said David Maslo, head of business development at ARC.
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The Cambridge Systemic Risks Hub researches the causes, consequences, and possible solutions for systemic risks to enhance the insurance industry’s ability to address present and emerging dangers.