Pikine, Senegal’s second largest city with more than 750,000 inhabitants, signed a parametric insurance contract against excess rainfall, structured by AXA Climate and underwritten by a consortium of Senegalese insurance companies AXA Sénégal, ASKIA Assurances and SUNU Assurances, and reinsured by Africa Risk Capacity (ARC) Ltd.
The insurance will give Pikine 200 million CFA francs in the event of two consecutive days of rainfall exceeding 126 mm, which is triggered relatively frequently (on average every 4.7 years).
Rainfall will reportedly be measured by a weather station installed in the city and managed by the Senegalese National Meteorological Service.
Meanwhile, two local NGOs in Pikine, Eau Vie Environnement and UrbaSEN, developed contingency and adaptation plans.
AXA commented: “This demand-driven collaboration with Pikine has been a very enjoyable experience and a source of great learning. 85% of the premium was subsidized by Humanity Insured and their involvement from the outset of the project has been invaluable.”
“Such a high level of subsidy allows us to frame our initiatives within the hashtag #climatejustice. None of this would be possible without the co-funding of our partners in the InsuResilience Solutions Fund (ISF).”
David Maslo, CEO of ARC Ltd, added: “Our mission is not just design; more importantly, market execution.
“In Senegal, we are delighted to be working with AXA Climate, ASKIA ASSURANCES and SUNU Assurances to co-develop and launch a parametric urban flooding product based on ground sensors.
“Together, we combine technical expertise, capital and market capabilities to deliver innovative, affordable insurance solutions designed to enable fast, objective claims payouts in urban environments.
“This complements the Sovereign River Flood Parameters product launched in Madagascar this month, extending coverage of different flood types, from urban stormwater risk at the municipal level to river risk at the sovereign level.”