Ambitions to grow risk pool to $1.5bn by 2020
Africa’s first sovereign catastrophe insurance pool, the African Risk Capacity (ARC), has plans to expand both its capacity and the number of countries covered, as well as it intends to include flood and cyclone risk among its products.
ARC director general Mohamed Beavogui said to Reuters that “the disaster cover provided will expand to cover 30 countries by 2020, which should enable the pool to provide $1.5 billion of cover”.
The support of both traditional reinsurers and alternative or ILS markets will be key to support ARC’s growth objectives. The attractive nature of a diversifying African pool of risk should help to ensure ARC can achieve attractive pricing for its risk transfer, which ultimately will help to keep its products cheaper for the nations and people who need them.
As well as this, the ARC has been working on new risk models to support sovereign risk transfer insurance for flood and cyclone risks, and a tropical cyclone insurance product is expected to be available before the end of this year.