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Public-Private Partnership to Develop Flood Insurance and Build Financial Resilience in Ghana


The Ghana Ministry of Finance, the United
Nations Development Programme (UNDP), the German Government, and the Insurance Development Forum (IDF), announced today the launch of a Tripartite project to develop a sovereign risk transfer scheme for urban floods in Ghana, alongside long-term investments in
the country’s capacity to leverage and integrate insurance and risk financing into their
development strategies. The announcement was made during the IDF Summit in Zurich, Switzerland.

The risk transfer project is led by IDF members Allianz and Swiss Re, and closely supported
by UNDP. Further partners in the project are flood risk consultants HKV, microsatellite operator
ICEYE, and media monitor Flood Tags. It aims to enhance the response of the Ghanaian National Disaster Management Organisation (NADMO) and local authorities after severe flooding, especially for poor and vulnerable people.

Alhassan Iddrisu, Director, Economic Strategy and Research Division at Ghana’s Ministry of Finance, noted: “We welcome the cross-sector collaboration in the Tripartite Insurance Programme as one of the financing mechanisms for climate adaptation. Through the industry-led insurance project to develop an innovative risk transfer scheme for urban floods, with its knowledge-sharing element, we aim to improve and develop greater local
ownership of risk analysis and provide a faster response and recovery, especially to our most
vulnerable citizens. The work with UNDP will contribute to mainstreaming climate and disaster
risk finance into our Ministry’s work, and together, these efforts will help to strengthen our country’s macroeconomic stability and sustainable development agenda.”

By carefully selecting a pre-defined trigger for pay-out as opposed to assessing actual losses,
the parametric insurance solution will enable quick pay-outs in case of a flood. This will improve
resilience and support the rapid re-establishment of economic activity of low-income communities in urban areas, starting with the Greater Accra Metropolitan Area (GAMA). While developing an insurance scheme for major floods, the project also aims to enhance the disaster response capacity of Ghanaian institutions through increased access to data, detailed risk
insights, and activation of contingency protocols.
Ababacar Diaw, CEO, Allianz Ghana, said: “The collaborative development of this parametric
insurance solution through a public-private partnership plays into the UN Sustainable
Development Goals and is an important contribution to increasing the climate resilience of
urban poor and vulnerable people in Accra. Parametric insurance solutions are especially useful in regions where insurance infrastructure, such as good data, is less available.”

The UNDP-led work with the Government of Ghana aims to enhance the country’s long-term financial resilience, through strengthening capacity to financially manage risk, the integration of insurance and risk financing into national development strategy and delivery, and the
development of insurance markets and inclusive insurance solutions for at-risk populations.

UNDP Resident Representative in Ghana, Angela Lusigi pointed out, “At UNDP Ghana, we
are committed to supporting integrated development solutions that build resilience across
society to protect Ghana’s development progress. This project to develop an innovative insurance solution for managing flood risks and to provide rapid pay-outs as a safety net for poor and vulnerable urban communities is welcome. It will serve as a boost to government and private sector efforts to provide wider access to insurance and risk finance. By blending the financial-solution expertise developed by the government, with the long-term development and governance support offered by UNDP in partnership with the private sector, we will be able to advance Ghana’s ambitious development agenda.”

Ghana is one of the countries most prone to floods in West Africa, and the impact of climate
change is exacerbating the risk of flooding in urban areas. While the entire population of Greater Accra may indirectly benefit from the risk transfer product, the core beneficiaries are the poor and vulnerable residents in the GAMA region.

The InsuResilience Solutions Fund (ISF), funded by the KfW Development Bank on behalf of
the German Federal Ministry for Economic Cooperation and Development (BMZ) and
managed by Frankfurt School of Finance & Management, will co-fund the risk transfer project
alongside the IDF insurance industry members.
Claudia Thyme, Industry Deputy Chair, IDF Sovereign and Humanitarian Solutions
Working Group, said, “One reason why the protection gap persists is that it is often costly to
design insurance solutions tailored to the specific needs and requirements of developing
countries. Co-funding from the German Government enables the IDF to uniquely address this problem by working on the product development stage in cross-company teams, as an
industry. Once a programme has been designed, it is easier for governments to find insurance
companies to insure the risk.”

This risk transfer project launch follows projects launched in 2020, 2021 and 2022 with Peru;
Medellín, Colombia and Mexico, respectively, but is the first launched in Africa under the
Tripartite Agreement announced in 2019 between the UNDP, the German Government, and
the IDF. The Tripartite Programme aims to provide technical assistance and sovereign and
sub-sovereign risk financing solutions to countries vulnerable to the impacts of climate change,
for their public assets, as well as for sectors, such as agriculture, education, health and transport, among others, to protect their most vulnerable populations.

About the Tripartite Programme

Announced in 2019 as the Tripartite Agreement between UNDP, the German Federal Ministry
for Economic Cooperation and Development (BMZ) and the Insurance Development Forum (IDF) at the United Nations Secretary General’s Climate Action Summit, the Tripartite Programme aims to deliver technical assistance and risk transfer solutions to 20 countries by 2025. Today it has more than 70 IDF insurance industry member experts and more than 60 UNDP local and regional representatives engaging with governments in developing countries vulnerable to the impacts of climate change and other natural disasters.

About UNDP’s Insurance & Risk Finance Facility

The Insurance and Risk Finance Facility (IRFF) is part of UNDP’s Sustainable Finance Hub,
and it is a flagship initiative dedicated to insurance and risk finance. The IRFF manages UNDP’s global representation in the insurance space. It is a one-stop shop for innovative solutions for UNDP Country Offices, programme countries and partners. This includes issues related to insurance and risk finance, networking, partner development, policy, and guidelines, technical and implementation, capacity and assistance, and financing opportunities.

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