Africa Risk Capacity to splurge US$100m in Zimbabwe

PHILLIMON MHLANGA

Johannesburg-headquartered insurance firm, Africa Risk Capacity Limited  (ARC Limited), will  spend more than US$100m towards insurance against drought in Zimbabwe,Business Times can report.

It comes at a  time when Zimbabwe is increasingly becoming  vulnerable to  severe drought events  and other calamities such as floods and tropical cyclones.

The latest development was revealed by ARC Limited CEO,Lesly Ndlovu.

“ In Zimbabwe , we providing insurance against drought to the Government  of Zimbabwe as well as companies in the private sector that are targeting agriculture industry,” Ndlovu told Business Times this week.

He added: “We are looking at US$100m investment. We are BBB+ rated  by Fitch,which makes us one of the highest rated insurance and reinsurance company  in the African continent.

“The problem that we are solving is related to climate change, which is increasing the  frequency and severity of  extreme weather events such as droughts  as we all see within Zimbabwe.

“And we provide insurance against such events so that when a drought happens, farmers will have financial means to recommence their economic activities.

This is extremely important in a country like Zimbabwe where agriculture plays a very big role  in terms of  economy and this is central to the plans of the government  of Zimbabwe to improve the economic standing of Zimbabwe.”

Established in 2014, ARC Limited, is   Africa’s largest provider of weather-related insurance.

Apart from drought, it  also provides insurance against floods, and tropical cyclones.

The hybrid insurer operate across 35 countries in Africa including Zimbabwe.

It also provides parametric insurance services to African Union (AU) member States and farmer organisations, employing innovative financing mechanisms to pool disaster-related risk across Africa and transferring it to international risk markets.

ARC Limited board member, Saif El Din Daoud Abd El Rhman said agriculture insurance was critical.

“Most economies are agriculture based. So, agriculture is still the heart of our economies. It is , therefore, important that we be proactive in these kind of crisis,” he said .

In the last decade, ARC Limited, has covered more than 100m Africans against natural disasters and has paid  more than US$125m in claims to the AU member States.

In doing so, ARC Limited improves the continent’s response to climate-related disasters and contributes to resilience building and ultimately to food security.

Efforts are ongoing to ensure the ARC  Limited product portfolio is reflective of the needs of  AU member States and provides progressive solutions to weather-related disasters.

ARC Ltd was established with a specific commercial mandate as a Class 2 mutual insurance company with seed capital funding.

Its membership is by African governments comprising of countries who have taken up a policy in any particular year, as well as capital contributors.

It is seeded by the United Kingdom’s Foreign, Commonwealth and Development Office, and Germany’s Kreditanstalt .