ARC Ltd. Celebrates 10 Years of Pioneering Climate Risks Solutions Across Africa

JOHANNESBURG, 4 March 2023 – African Risk Capacity Limited (ARC Ltd.), the parametric insurer and financial affiliate of the ARC Group, is celebrating its 10th anniversary. Since being founded in 2014 with the sole and unique mandate from the African Union Heads of States to provide insurance and other risk transfer solutions to African countries, ARC Ltd. has pioneered climate resilience across the continent.

Helping governments better respond to climate shocks through rapid payouts, ARC Ltd. has paid out over US$170 million in claims to support vulnerable communities. The company has also evolved significantly, fom offering only drought insurance, it now covers both crops and livestock, and has diversified its product portfolio to include floods, tropical cyclones, and health-related risks, such as outbreaks and epidemics.

“We started out with the premise that partnering governments would be the most effective way to progress on this disaster risk management and financing journey, and it proved correct,” comments ARC Ltd. CEO Lesley Ndlovu. “We have successfully built and nurtured these relationships and been able to sign up 39 member states across Africa.”

Beyond working with governments, ARC Ltd. has extended its partnerships to include providing insurance to humanitarian agencies like the World Food Programme, Start Network, and the UN High Commission for Refugees to support vulnerable populations. The company also works with the private sector via reinsurance to protect the incomes of small- to medium-scale farmers, who are most at risk from climate change impacts.

“I am particularly pleased with the over US$170 million we have paid in claims. Behind these figures are communities across Africa that benefited after they were struck by natural disasters,” says Ndlovu. “We are also pleased by the number of countries that now utilise insurance as part of their disaster risk financing matrix. And while it’s too early to say that the battle is won, we have made significant progress in shifting from reactive to more proactive disaster risk management and financing approaches over the past decade.”

Pioneering innovative products and risk transfer solutions tailored to individual countries’ changing needs are central to ARC Ltd.’s activities. “Additionally, the increasing severity and frequency of natural disasters is a critical focus for us. This phenomenon highlights the importance of having multiple financial instruments to complement the insurance offering for which we are known,” says Ndlovu.

Looking ahead, ARC Ltd. aims to expand its coverage across all 55 African Union countries. “According to the latest data, we estimate that there are 700 million people whose economic livelihoods and lives are at risk due to climate change. Our mandate, mission and vision as an organisation is to provide coverage to all who need it. This is what motivates us every day,” says Ndlovu. “What started as a concept has evolved in 10 years to become a proven and trusted solution for the continent. We will keep scaling up for even more impact.”

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.

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