Africa Specialty Risks, a pan-African focused reinsurance group, has announced a new partnership with a leading European reinsurer to double its parametric risk transfer capacity, with this new arrangement facilitated by broker Inver Re.
Africa Specialty Risks (ASR) said that the landmark parametric reinsurance partnership will enable it to build out capacity to cover vulnerable populations and economies in Africa and the Middle East.
It will immediately double ASR’s available parametric capability for smallholder farmers, natural perils and renewables, and the reinsurance groups said the partnership comes with the prospect of further expansion in the future.
Africa Specialty Risks launched a dedicated specialist parametric risk transfer, insurance and reinsurance unit, making some high-profile hires back in 2021.
The company has had a focus on delivering solutions to support food, water, and environmental security, exacerbated by climate change, seeing these as key challenges for Africa and the Middle East.
ASR said that insurance is increasingly recognised in key policy circles as an effective remedy, but that additional insurance penetration is needed to meet the problem head-on.
ASR believes that parametric reinsurance can facilitate the flow of capital to support these vulnerable populations and underpin effective delivery of insurance and disaster risk financing solutions.
Dr Raveem Ismail, Head of Parametric Underwriting at ASR, commented, “This partnership really is a step forward. Although there have been efforts to increase the flow of reinsurance capital into Africa over the past decade, few have come in the context of a commercial entity specifically focused on risks in the region.
“ASR is fully committed to Africa and the Middle East and we are delighted to be able to double our parametric capabilities.”
Tom Johansmeyer, Global Head of Index, Inver Re, added, “It has been an honour and a pleasure to support this new partnership. While many are shy of the challenges associated with risks in the Global South, the opportunity is significant, and creative thinking can make it more attainable.
“This partnership, built on the strength of ASR’s index development and deal sourcing capabilities and both parties commitment to Africa and the Middle East, should serve as a model for expanding worldwide reinsurance support for risks in the Global South.”
ASR’s parametric division has already demonstrated it can support resilience and paying for claims on weather, climate, and seismic risks, with one particular example being the Mozambique Cyclone Parametric Reinsurance Program.
