ARC payouts exceed $170m as parametric insurer celebrates 10th anniversary
African Risk Capacity Limited (ARC Ltd.), the parametric insurer and financial affiliate of the ARC Group, has paid out over $170 million in claims to support vulnerable communities since its inception.
Founded in 2014, ARC Ltd. celebrates its 10th year of establishment with the intent to help governments better respond to climate shocks through rapid payouts.
Over the years, the company has evolved significantly, having initially offered just drought insurance to now cover both crops and livestock.
ARC has also diversified its product portfolio to include floods, tropical cyclones, and health-related risks, such as outbreaks and epidemics.
It was founded with the sole and unique mandate from the African Union Heads of States to provide insurance and other risk transfer solutions to African countries and has since pioneered climate resilience across the continent.
Lesley Ndlovu, Chief Executive Officer, ARC Ltd. commented, “We started out with the premise that partnering governments would be the most effective way to progress on this disaster risk management and financing journey, and it proved correct. We have successfully built and nurtured these relationships and been able to sign up 39 member states across Africa.”
As well as its work with governments, ARC Ltd. has extended its partnerships to include providing insurance to humanitarian agencies like the World Food Programme, Start Network, and the UN High Commission for Refugees to support vulnerable populations.
It also now works with the private sector via reinsurance to protect the incomes of small and medium-sized farmers.
Ndlovu added, “I am particularly pleased with the over US$170 million we have paid in claims. Behind these figures are communities across Africa that benefited after they were struck by natural disasters. We are also pleased by the number of countries that now utilise insurance as part of their disaster risk financing matrix. And while it’s too early to say that the battle is won, we have made significant progress in shifting from reactive to more proactive disaster risk management and financing approaches over the past decade.”
The company is now focusing on the importance of having multiple financial instruments to complement the insurance offering with the increasing severity and frequency of natural disasters. ARC Ltd. aims to expand its coverage across all 55 African Union countries.
Ndlovu concluded, “According to the latest data, we estimate that there are 700 million people whose economic livelihoods and lives are at risk due to climate change. Our mandate, mission and vision as an organisation is to provide coverage to all who need it. This is what motivates us every day. What started as a concept has evolved in 10 years to become a proven and trusted solution for the continent. We will keep scaling up for even more impact.”
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