Group entity Axa Dedicated to climate and environmental adaptation pursues the development of parametric insurance products in Africa, to support populations against climate risks. Three municipalities of Togo, Kloto 1, Golfe 1 et Gulf 7have just taken out insurance intended to strengthen their resilience in the face of precipitation likely to cause major claims for their 720,000 inhabitants. “” Africa is struck by floods repeatedly, and in particular in cities because they have few drainage networks and often very dry soils, which makes the infiltration of water difficult, explain Eliot Pernetdeputy manager of the public sector department at Axa Climate. This risk is growing with climate change and very strong urbanization, and there are therefore more and more coverage needs. Or Flood is really a risk that is not made by insurance in African cities. »
Ten weather stations to measure precipitation
In addition, there is no wealthy technique for making parametric insurance concerning floods because it is very difficult to measure the losses very precisely. This would require very complex models with significant margin of uncertainty. “” The whole product was designed with local players et nWe tried to make the product as simple as possiblesummarizes Eliot Pernet. We decided to measure the precipitation, with ten weather stations that we have installed in cities in partnership with national services, and to start that there would be damage each time it was raining exceptional quantities, and that this would justify compensation. »
Insurance is triggered by station, in a binary manner, if a precipitation threshold is reached. The maximum annual amount paid is 150,000 euros. Compensation makes it possible to finance repairs (water pumping, cleaning, reconstruction of gutters, etc.) and assistance to victims (temporary rehousing, hygiene kits, etc.) in cities with no financial means, and which are now covered all year round. The National Civil Protection Agency (ANPC) has drawn up contingency plans to list the financial measures.
-« The implementation of this parametric insurance marks a turning point for our risk management. We are now better prepared and can react with more anticipation to floods “, estimated Aimé Koffi Djikounoumayor of Gulf 7.
Subscription from a local insurer
The program is funded by international aid through theInsuresilience Solutions Fund (ISF), A background of the German public bank Kfw. The donors (ISF and a private background, Humanity insured) finance 80 % of the subscription and the municipalities settle 20 % of the total cost of the annual premium. “” Insurance is taken out with a local insurer, Sunu Insurance Togo. This is quite innovative because macro setting products are often offered directly by large reinsurers like theAfrican Risk Capacity (ARC)which plays here the role of reinsurer Adds Eliot Pernet.
A comparable project, funded by ISF, should see the light of day at Pikinethe second city of Senegalone March 2026.
