JBA is supporting ARC’s development and implementation of flood insurance across the continent with a solution that combines our probabilistic risk modelling and flood event monitoring.
African Risk Capacity (ARC) supports its members to better prepare, plan and respond to extreme weather events such as droughts and tropical cyclones. It does this through capacity building, early warning and innovative sovereign risk transfer through insurance-based solutions.
In many sub-Saharan countries, over 60% of workers are employed in the agricultural sector. This is significantly highly than in South Asia (30-40%) and Europe and North America (1-2%) (World Bank, 2025). When set against the diverse range of weather-related and climate risks that the continent experiences, this heightens the vulnerability of many African countries.
ARC draws on expert technical guidance to determine when to trigger readily available funds to enable countries to recovery quickly from damaging events. By pooling risk across the continent, a cost-effective solution is created that reduces the financial burden on individual governments and lowers reliance on external aid.
JBA’s probabilistic flood model provides the risk analytics needed to design ARC’s flood insurance. The model is based on detailed, consistent and validated flood maps and a vast set of simulated flood events, helping to represent all plausible outcomes. Actuaries at ARC can use the model outputs to design and test options for the flood policy, supporting the development of cover that meets countries’ needs at a price they can afford.
Once the policy is in place, the triggers for payment are monitored using Flood Foresight, JBA’s flood forecasting and monitoring system. Each day, an estimate of flood extent and depth is generated, using the same flood maps that inform the probabilistic model. Applying the same methods and data that were used to determine the trigger levels for the policy, an estimate of the financial impact of the event for the area of interest is made. This estimate is compared against the trigger in a formal process to determine whether the policy should make a payment to the country affected.
The design and implementation of the scheme means that it is possible to assess the impacts and make payments rapidly, allowing people to take steps to recover more quickly than might be the case for some other forms of financial protection.
ARC has indicated an intention to extend the flood policy where applicable.
As part of the initial development project, an expert panel reviewed JBA’s methods and assessed them to be “state-of-the-art”. The panel recommended further refinements to components of the system that are now being developed for future implementation.
Contact our team to learn more about this project.
