Africa Specialty Risks (ASR) has embarked on a venture with a European reinsurer to bolster its parametric reinsurance offerings.
The collaboration is aimed at aiding vulnerable groups and bolstering economies across Africa and the Middle East. The partnership is also set to enhance ASR’s capacity in providing parametric coverage for smallholder farmers, natural disasters, and renewable energy projects, with potential for further growth.
Facilitated by Inver Re, the initiative addresses issues such as food, water, and environmental security, which are becoming increasingly severe due to climate change.
ASR notes that while insurance solutions are recognized as vital by policy makers for mitigating these challenges, greater penetration is still necessary. The adoption of parametric reinsurance is designed to streamline capital flow to support at-risk populations in these regions.
The partnership is also timely, with a recent report from Swiss Re highlighting the continued challenges brought about by climate change.
ASR’s parametric division already has experience in this field, offering resilience against weather, climate, and seismic risks, notably through initiatives like the Mozambique Cyclone Parametric Reinsurance Program.
Dr Raveem Ismail (pictured above), head of parametric underwriting at ASR, commented on the partnership, noting that it is a significant step forward for the company.
“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,” Ismail said. “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 at Inver Re, also expressed enthusiasm about facilitating the 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,” Johansmeyer said. “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.”
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