ARC and Axa Climate partner on new Togolese flood parametric policy

By Rebecca Delaney

March 31 - (The Insurer) - African Risk Capacity Limited has been selected as the reinsurer for a newly launched parametric flood policy covering three municipalities in Togo.

The parametric project for the Kloto 1, Golfe 1 and Golfe 7 townships was designed in partnership with Axa Climate, with coordination from the National Directorate of Insurance of Togo.

The policy is underwritten by Sunu Assurances Togo as the local insurer.

Agence Nationale de la Météorologie du Togo oversaw the installation of 10 TAHMO weather stations in the communes to enable precise measurement of rainfall.

Each weather station will be able to trigger an insurance payment of 33 million CFA francs ($54,276) to the municipality when it measures more than 100 millimetres of rain over the course of 24 hours, with a limit of 100 million CFA francs per year per municipality

The insurance is designed to trigger one payout per station, with the funds used to pump out water and provide aid to affected populations based on a predefined contingency plan.

The implementation of the project was supervised by the Agence Nationale de la Protection Civile, which also helped to develop the contingency plans for each township.

Funding for the project was supported by co-financing from the InsuResilience Solutions Fund and a premium subsidy from Humanity Insured.

Each municipality has contributed up to 20% of the total cost of the annual premium to guarantee the affordability of the product.

Earlier this month, Sustainable Insurer spoke to Caroline Birch, project manager at Humanity Insured, about the industry-backed non-profit's project pipeline for 2025. Birch also outlined the importance of premium subsidies in order to ensure that participants understand the product they are buying and when to expect a payment or not.