Johannesburg:
The African Risk Capacity (ARC) Group offers a new insurance mechanism to African countries in the South West Indian Ocean (SOOI) region to cope with the devastating effects of cyclones tropical. This parametric insurance product will provide countries with predictable and rapid funding for a rapid response to deal with emergencies caused by tropical cyclones. This mechanism represents an important step in building resilience to disasters linked to climate change on the African continent.
The South West Indian Ocean (SOOI) region is one of the most active areas in the world in terms of tropical cyclone development. On average, thirteen cyclone events with wind speeds above 63 km / h and possibly exceeding 200 km / h occur each year in the SOOI region. High wind speeds are a key factor contributing to the damage caused by tropical cyclones.
Developments in the SOOI region in 2019, including the devastating effects of Cyclones Idai and Kenneth in Mozambique, have led to renewed interest from countries in parametric tropical cyclone insurance coverage. Therefore, ARC has developed a model capable of correctly estimating the risk and economic losses resulting from tropical cyclones, which is suitable for SOOI countries, such as Mozambique, Madagascar, Comoros, Mauritius, Seychelles and Tanzania.
“Our goal is to continue to diversify our insurance product offering in order to effectively meet the needs of our Member States. This new offer will allow our Member States to better anticipate and manage extreme weather events while ensuring that the impact of such events on the population is mitigated ”, declared Mr. Ibrahima Cheikh Diong, Deputy Secretary General of the United Nations. and Chief Executive Officer of the Panafrican Mutual of Risk Management Group ( ARC Risk Capacity Group ).
Madagascar is the first country in the region to subscribe to the parametric insurance coverage of the ARC named, ARC tropical cyclone , thanks to the support of the premium by KfW for the season 2020-2021. Madagascar's participation will complement government efforts aimed at reducing the impacts of climate change and weather variability on the most vulnerable populations.
Madagascar, the largest island in Africa, is often exposed to cyclones.
According to the UN Office for the Coordination of Humanitarian Affairs, each year, an average of 1.5 cyclones affects Madagascar, the highest number in Africa, and each severe cyclone affects an average of 700,000 people.
“As part of the implementation of the national policy for natural disaster risk management, Madagascar has subscribed to the new tropical cyclone insurance product offered by the ARC Group in order to better protect its population against enormous damage caused by extreme weather events, but also to allow the country to recover quickly after being affected by cyclones ”, declared HE Richard Randriamandrato, Minister of Economy and Finance of the Republic of Madagascar.
About the ARC Group:
The Panafrican Mutual Risk Management Group ( ARC Risk Capacity Group ) includes the ARC Institution ( ARC Agency ) and the African Risk Capacity Insurance Company Limited- ARC Ltd).
The ARC Institution was established in 2012 as a specialized agency of the African Union to help Member States improve their capacities to better plan, prepare for and respond to weather-related disasters. ARC Ltd is a mutual insurance company providing risk transfer services to Member States, through risk pooling and through access to reinsurance markets.
ARC was established on the principle that investing in better preparedness while having an early warning system, through an innovative funding approach, is more cost effective and can save up to four dollars for every dollar invested ex ante.
With the support of the United Kingdom, Germany, Sweden, Switzerland, Canada, France, the European Union, the Rockefeller Foundation and the United States, the ARC assists the states AU members to reduce the risk of loss and damage caused by extreme weather events that affect the people of Africa by providing, through sovereign disaster risk insurance, targeted responses to natural disasters, and in a more timely, cost-effective, objective and transparent manner. ARC currently has significant expertise that it uses to help Member States tackle other significant threats facing the continent, including floods, outbreaks and disease outbreaks.
Since 2014, 62 insurance policies have been signed by member states for cumulative insurance coverage of US $ 719 million for the protection of 72 million vulnerable people in participating countries.