80 The creation of risk pools has improved access to insurance, addressed the cost of premiums, and decreased risk levels. Using a risk pooling facility as an early response mechanism has shown that $1 spent on early intervention from ARC saves $2 spent after a crisis. Diversification & innovation Our greatest diversification has been in the non-sovereign business (NSB) line. From providing parametric insurance and risk transfer to only governments, we began offering these products in 2020 to groups such as farmers, in countries that have not taken out a policy with us, perhaps due to fiscal constraints. The NSB line has been growing and in 2023, we achieved a total gross written premium of $14.78 million with $8.05 million for Pool 10 policies, $1.45 million for the Pool 9 endorsement of Drive policies, and $6.73 million for future Pool for multi-year policies. We surpassed our targeted gross premium for the year of $14.5 million, making this the biggest pool since the inception of the NSB business line. In terms of product diversification, we have expanded our drought insurance coverage to include both crops and livestock and included additional perils to our portfolio, such as floods, tropical cyclones, and health risks, such as outbreaks and epidemics, thereby enhancing our ability to support African countries in managing climate-related risks. Pioneering innovative products and risk transfer solutions tailored to individual countries’ changing needs are central to our activities. A critical focus is the increasing severity and frequency of natural disasters – this phenomenon highlights the importance of having multiple financial instruments to complement the insurance we provide. Strategic partnerships Over the years, we also extended our partnerships to include humanitarian organisations. ARC’s innovative Replica Programme allows humanitarian aid agencies – such as USAID, the World Food Programme (WFP) and Start Network – to replicate the insurance policies of member states, effectively doubling their coverage and closing the protection gap. We partnered with the WFP in Djibouti as part of their De-Risking, Inclusion and Value Enhancement of Pastoral Economies Project (DRIVE), and we now also work with the private sector to protect the incomes of small- to mediumscale farmers, who are facing accelerating climate changerelated disasters. This year, we welcomed the United Nations High Commissioner for Refugees as our fourth Replica partner and Norad as our premium support funder. Donor support We are grateful that the United Kingdom Foreign, Commonwealth & Development Office (FCDO) and the German Federal Ministry for Economic Cooperation and Development (BMZ), through the Kreditanstalt für Wiederaufbau (KfW), saw the value of ARC Ltd. from the outset and have been part of our efforts since then. We have received significant seed capital over the years, which has enabled the development and diversification of our portfolio. Accolades This year, we received the global insurance industry’s top overall environmental, social and governance (ESG) scores following an audit by international ESG research, ratings and data firm, Sustainalytics. Credit rating agency Fitch also upgraded our outlook to stable with an Insurer Financial Strength (IFS) rating of ‘A-’ and a Long-Term Issuer Default Rating (IDR) of ‘BBB+’. Role in the global climate change conversation The mandate from the African Union enables us to speak on behalf of our member states, and we play an active role in representing Africa in global climate change forums, such as COP, the Davos Summit, New York Climate Week and the Africa Climate Summit. Over the years, we have also become an active member of the UN Principles for Sustainable Insurance, the Glasgow Financial Alliance for Net Zero, the Net-Zero Insurance Alliance and the Principles for Responsible Investment. Africa’s voice is crucial at these global events, and we continue to share the unique experiences of our continent. 1 0TH ANN I VERSARY : H I GHL I GHTS FROM THE PAST 1 0 YEARS
RkJQdWJsaXNoZXIy MTM3NDM0