NAIROBI, Kenya. Nov 24 – The African Risk Capacity (ARC) has unveiled a USD150 million (Sh18.3billion) insurance subsidy model against disasters in a bid to increase the affordability of insuring risk in African countries.
Speaking during a press briefing in Nairobi, ARC CEO Lesley Ndlovu said all African countries can access the subsidy noting that it will be applied on a regressive basis.
“When a country accesses the subsidy in the first year, they will get 100 per cent subsidy, in the second year it will go to 80 per cent and so on,” said Ndlovu.
With the ongoing climate change crisis being experienced across the globe, Ndlovu called on all African governments to take up insurance against disasters so as to be able to deal with the issues such as drought or cyclones when they occur.
“We cannot continue to wait for disasters so that we start raising funds to deal with them, we need to invest in managing risk and also invest in adaptation in the face of climate change,” he said.
In the long term, ARC plans to increase the no of countries purchasing risk insurance from covering 30million Africans to 700 million.
In 2022, the fund paid over USD60 million dollars in claims to 7 countries.
Closer home, Ndlovu called on the Kenyan government to renew its membership in ARC.
Kenya, which had taken up a cover between 2015 to 2017, no longer pays premiums despite having completed a national disaster management plan.
“Kenya has a leadership role in creating innovative financial solutions around mitigating the impact of climate change,” said Ndlovu.
He lauded President William Ruto for being a climate change ambassador, lending his voice to important global discussions.
Despite a lack of membership at the national level, ARC continues to be active in Kenya by providing reinsurance to the Kenya Livestock Insurance Program and through its partnership with Pula Advisors, an insurtech in the agricultural insurance arena.
