JOHANNESBURG – A recent sovereign risk pools summit hosted by the Centre for Disaster Protection and Gallagher Re has resulted in a joint Memorandum of Understanding.
Held on 5 October 2023, the summit facilitated strategic engagement for the CEOs of African Risk Capacity Limited (ARC Ltd, a financial affiliate of the ARC Group), the Pacific Catastrophe Risk Insurance Company (PCRIC), the Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC) including Central America, and senior advisors for the Southeast Asia Disaster Risk Insurance Facility (SEADRIF). These organisations form the Sovereign Risk Pools, established to serve sovereign climate and disaster risk insurance objectives of nearly 100 nations globally.
The summit also welcomed representatives of the World Bank Group, Hiscox, the UK’s Foreign, Commonwealth & Development Office (FCDO), the Sustainable Markets Initiative, the Insurance Development Forum, the Global Shield and the Global Shield Solutions Platform. They joined strategic discussions about disaster finance trends and gaps, and how the Sovereign Risk Pools can collaborate to scale-up the availability of pre-arranged disaster finance to serve public disaster response needs.
The Sovereign Risk Pool executives have agreed to cooperate under the joint MoU as follows:
- to establish principles defining development insurance programmes;
- use pre-arranged finance to support SDG country development objectives, including protecting vulnerable populations;
- accelerate innovation;
- expand access to disaster risk finance for public benefit; and
- to seek the capital required to reach scale globally.
“We are pleased that the pools also agreed to collaborate more extensively to develop parametric models and to further explore meso- micro and replica schemes to complement sovereign-level risk transfer,” says ARC Ltd. CEO Lesley Ndlovu. “This is our area of expertise, and where we can share knowledge and best practices.”
The pools also confirmed a shared interest in exploring the establishment of a joint reinsurance facility to serve global risk transfer access to global capital markets, which is needed in addition to base capital required to enable expanded insurance offerings to countries.
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For more information about The African Risk Capacity Limited (ARC Ltd), or to arrange an interview, please contact Sonnette at sonnette@bigambitions.co.za.
About ARC Ltd.
The African Risk Capacity Limited (ARC Ltd.) is a financial affiliate of the African Risk Capacity (ARC) Group, a specialised agency of the African Union (AU), an initiative designed to improve current responses to climate-related food security emergencies.
ARC Ltd. is a mutual insurance facility comprised of its members, which have included Kenya, Mauritania, Niger, Senegal, Mali, Malawi, the Gambia, Burkina Faso, Chad, Zimbabwe, Togo, Madagascar, and Zambia.
The membership also includes its capital contributors who have provided premium subsidies, including USAID, FCDO, SDC, KFW/BMZ, IFAD, AFDB, WFP and STARTNETWORK.
