The Ghana Ministry of Finance, the United Nations Development Programme (UNDP), the German Government, and the Insurance Development Forum (IDF), have launched a project to develop flood insurance and financial resilience in Ghana.
The project is led by IDF members Allianz and Swiss Re and closely supported by UNDP. Further partners in the project are flood risk consultants HKV, microsatellite operator ICEYE, and media monitor Flood Tags.
Ghana is one of the countries most flood-prone in West Africa, and climate change is exacerbating this risk.
The parametric insurance solution will carefully select a pre-defined trigger for pay-out as opposed to assessing actual losses, which will enable quick pay-outs in case of flood.
IDF said this will improve resilience and support the rapid re-establishment of economic activity of low-income communities in urban areas. While developing an insurance scheme for major floods, the project also aims to enhance the disaster response capacity of Ghanaian institutions through increased access to data, detailed risk insights, and activation of contingency protocols.
Ababacar Diaw, Acting CEO, Allianz Ghana, said, “The collaborative development of this parametric insurance solution through a public-private partnership plays into the UN Sustainable Development Goals and is an important contribution to increasing the climate resilience of urban poor and vulnerable people in Accra. Parametric insurance solutions are especially useful in regions where insurance infrastructure, such as good data, is less available.”
Parametric insurance is thought to be particularly helpful in taking on risks that don’t lend themselves to traditional insurance, particularly extreme weather events. Parametric InsurTech Skyline Partners recently partnered with Howden and global reinsurer Munich Re to develop a parametric insurance solution designed to protect farmers in Jamaica from extreme weather events.
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