The Ministry of Finance, the UNDP, the German Government, and the Insurance Development Forum (IDF) have announced the launch of a tripartite project to develop a sovereign risk transfer scheme for urban floods in Ghana, as well as long-term investments in the country's capacity to leverage and integrate insurance and risk financing into development strategies.
The news was announced during the IDF Summit in Zurich, Switzerland.
IDF members Allianz and Swiss Re are leading the risk transfer project, which is backed up by UNDP. Flood risk consultants HKV, microsatellite operator ICEYE, and media monitor Flood Tags are all involved in the initiative. Its goal is to improve the Ghanaian National Disaster Management Organization's (NADMO) and local government's response to severe floods.
Starting with the Greater Accra Metropolitan Area, this will strengthen resilience and enable the quick re-establishment of economic activity in low-income communities in metropolitan areas (GAMA). The initiative intends to improve Ghanaian institutions' disaster response capabilities by increasing access to data, providing precise risk assessments, and activating contingency processes while building an insurance plan for big floods.
"The collaborative development of this parametric insurance solution through a public-private partnership plays into the United Nations Sustainable Development Goals and is an important contribution to increasing the climate resilience of Accra's urban poor and vulnerable people," said Ababacar Diaw, CEO of Allianz Ghana. "Parametric insurance solutions are particularly beneficial in areas where insurance infrastructure, such as excellent data, is scarce."
The UNDP's collaboration with the Ghanaian government aims to improve the country's long-term financial resilience by strengthening risk management capacity, integrating insurance and risk financing into national development strategy and delivery, and developing insurance markets and inclusive insurance solutions for at-risk populations.
According to Angela Lusigi, the UNDP Resident Representative in Ghana, Ghana is one of the poorest countries in the world. West Africa has the most flood-prone countries, and climate change is worsening the danger of flooding in urban areas. While the risk transfer product may benefit the whole population of Greater Accra, the impoverished and vulnerable citizens of the GAMA region are the primary beneficiaries.
"At UNDP Ghana, we are dedicated to promoting integrated development solutions that strengthen societal resilience and safeguard Ghana's development progress." This initiative, which aims to create an innovative insurance solution for minimizing flood risks and providing quick payouts as a safety net for poor and vulnerable urban neighborhoods, is very welcome. It will help the government and business sector work together to expand access to insurance and risk financing. We will be able to achieve Ghana's ambitious development goal by combining the government's financial-solution expertise with UNDP's long-term development and governance support in conjunction with the private sector," she said.
The KfW Development Bank, on behalf of the German government, has supported the InsuResilience Solutions Fund (ISF).
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