In a significant move towards mitigating the devastating impact of floods in Africa, Floodbase has recently announced a strategic partnership with African Risk Capacity Limited (ARC Ltd.).
The collaboration aims to develop, distribute, and scale parametric flood insurance solutions across the continent.
Floods have emerged as a critical humanitarian challenge in Africa over the past few decades, exacerbated by factors such as climate change, rapid urbanisation, and population growth.
Despite the increasing risk, a majority of flood incidents in Africa remain uninsured, resulting in economic instability, agricultural vulnerability, and widespread community displacement.
One of the significant challenges in providing insurance coverage has been the vast expanse of farmlands and the high-risk status of African nations, making it difficult to structure adequate indemnity insurance.
To bridge this insurance gap, ARC Ltd. and Floodbase will collaborate to develop parametric flood microinsurance products that can be scaled to benefit smallholder farmers, offering protection against agricultural risks, the company said.
These innovative insurance products differ from traditional indemnity insurance by enabling rapid payouts within days or weeks once the flooding surpasses a predefined threshold. The pricing and payout thresholds will be predetermined based on Floodbase’s extensive 23-year flood monitoring history, the company noted.
This approach paves the way for nationwide agricultural flood insurance solutions, benefiting at-risk farmers and smallholders across the continent.
David Maslo, the Head of Business Development at ARC Ltd., expressed his enthusiasm for the partnership, stating, “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.”
The synergy between ARC Ltd.’s regional expertise and distribution network and Floodbase’s extensive flood data and technical proficiency promises to significantly reduce the impact of flooding, insure risk that was previously considered uninsurable, and enhance resilience throughout Africa.