"African insurers take up climate change challenge with $14bn pledge"

" African insurers take up climate change challenge with $14bn pledge \r\n A group of over 85 insurers in Africa has pledged to create a financing facility to provide US$14 billion of cover to help the continent\u2019s most vulnerable communities deal with climate disaster risks such as floods and droughts. \r\n The commitment to create the\u00a0African Climate Risk Facility (ACRF)\u00a0was made on Wednesday during the COP27 climate talks comes as developing countries\u00a0push their richer peers\u00a0to do more to help them pay for the costs of responding to such events. \r\n Demand for compensation for the\u00a0\u201closs and damage\u201d\u00a0caused by global warming has long been rejected by wealthy countries, whose leaders are wary of accepting liability for the emissions driving climate change. \r\n Africa, which accounts for less than 4% of greenhouse gas emissions, has long been expected to be severely impacted by climate change. \r\n Against that backdrop, the African insurance plan is based around creating a scalable, local market-based funding tool to help countries better manage the financial risk of climate shocks and increase the resilience of its more vulnerable communities, the group said in a statement. \r\n \u201cThis is the African insurance industry saying let\u2019s come together and try and solve this ourselves,\u201d said Kelvin Massingham, director risk and resilience at FSD Africa, one of the partners behind the launch. \r\n \u201cWe have a massive risk gap in Africa and existing solutions aren\u2019t working,\u201d Massingham said. FSD Africa is a UK government-backed development group. \r\n The ACRF will provide protection for 1.4 billion people against floods, droughts and tropical cyclones by providing US$14 billion of climate risk insurance by 2030 to African sovereigns, cities, humanitarian organisations and NGOs, the insurers said. \r\n The group is calling for US$900 million in funding from development partners and philanthropies to support the project, much of which will go towards providing a subsidy on the cost of the premium to help governments and cities with limited fiscal resources buy the cover. \r\n These donor funds will be held in a trust and managed by the African Development Bank ( AfDB ). \r\n \u201cThe facility will enable us to cover certain risks like floods, cyclones and droughts\u2026and to help us mitigate the risks we face as underwriters dealing with these climate risks,\u201d said Philip Lopokoiyit, chief executive at Nairobi-based insurer ICEA LION Group. \r\n The insurance commitment is the first from the 85 signatories of the Nairobi Declaration on Sustainable Insurance, signed in April 2021 by the industry to support the UN Sustainable Development Goals. \r\n The ACRF will provide a domestically funded alternative to global initiatives like the World Bank\u2019s Global Risk Financing Facility and the Global Shield Financing Facility, a new funding facility that will help countries that suffer heavy economic loss due to climate change-driven disasters, announced by World Bank president David Malpass on Tuesday. "

"African insurers take up climate change challenge with $14bn pledge"

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