ARC teams up with Floodbase for parametric African flood insurance
African Risk Capacity Limited (ARC Ltd.) has entered into a partnership with insurtech Floodbase that will see the pair working to develop, distribute, and scale parametric flood insurance products for Africa.
ARC is already delivering a number of parametric disaster insurance products across Africa, with a largely sovereign client-base.
Floodbase (read our previous article on the insurtech’s technology and ambitions) meanwhile, has developed parametric flood solutions that can provide near real-time monitoring of triggers and has been gaining scale globally, while also building out its client-base in the United States.
Flooding has enormous humanitarian impact in Africa and the challenge in delivering indemnity based insurance solutions there means parametric solutions have gained traction.
ARC Ltd. and Floodbase are working on parametric flood microinsurance products, with a vision to scale their reach across Africa to provide protection to smallholder farmers covering agricultural risk.
The parametric flood insurance products will be designed to pay out within days or weeks when predefined parametric triggers are breached.
Pre-arranged pricing and payout thresholds will be designed using Floodbase’s 23 years of monitored flood history, enabling a countrywide agricultural flood solution for at-risk farmers and smallholders.
“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,” explained David Maslo, ARC Ltd. Head of Business Development.
ARC continues to scale out its risk pool and as we reported recently the African parametric specialist has joined with other sovereign parametric risk pools around the world to explore how they can benefit from economies of scale, when it comes to reinsurance purchasing and potentially accessing the capital markets.
