Friday 16 May 2014

Africa gets first-ever natural disaster insurance pool

By Tim Sprinkle


Several African nations – including Kenya, Mauritania, Mozambique, Niger and Senegal to start -- are now better protected from extreme weather events as a result of a new African catastrophe insurance pool, launched Thursday by the African Risk Capacity (ARC).

The goal, according to backers, is to reduce African governments’ reliance on external emergency aid in the event of natural disasters.

"The creation of the first ever African catastrophe insurance pool is a transformative moment in our efforts to take ownership and use aid more effectively," said Dr Ngozi Okonjo-Iweala, Chair of the ARC agency board, in a statement. "It is an unprecedented way of organizing ourselves with our partners, with Africa taking the lead – taking our collective destiny into our own hands, rather than relying on the international community for bailouts."

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Germany and the UK provided US $200 million in startup capital for the mutual, which is initially domiciled in Bermuda, and the policies will provide a total of US $135 million in drought coverage tailored to the specific needs of each insured country. Industry partners in the effort include Stroock & Stroock & Lavan LLP, Appleby Bermuda, Marsh IAS and Willis Group.

"Droughts undermine our hard-won development gains, just as Africa is beginning to realize its vast potential," said Henry Rotich, Kenya’s Cabinet Secretary for the National Treasury. "ARC will help us build resilience among vulnerable populations, protect our agriculture investments, thereby increasing productivity, as well as promoting fiscal stability by preventing budget dislocation in a crisis."

Source PropertyCasualty360


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