Govt in talks to get natural disaster cover
Tuesday December 10 2019
Some residents of Birama cell in Kimisagara sector, Nyarugenge District try to salvage their belongings after heavy rains destroyed houses. PHOTO | FILE
The Government is considering getting natural disaster insurance to cover the potentially devastating impact of recurrent natural disasters.
Public officials said the government was in talks with ARC insurance Ltd, allied to Africa Risk Capacity, to assess the risk levels and determine the annual costs for the insurance coverage, as well as the payout thresholds.
The Africa Union allied mutual insurance company, a specialised agency of the continental body, helps member countries tackle the impact of natural disasters.
“We are developing indexes and then we agree with the agency the levels of coverage we are going to subscribe to. It is still too early to say how much we may need to pay as premiums. This is still under discussion,” said Jean Claude Musabyimana, permanent Secretary in the Ministry of Agriculture and Animal Resources.
The country faces drought, landslides, floods, earthquakes and windstorms, which affect about 40 per cent of different parts of the country’s population especially hilly, sloppy areas in northern and western provinces, according to the National Risk atlas.
Data from the Ministry in Charge of Emergency Management shows the rate of disasters and extreme weather in the country has risen significantly, taking a toll economically, environmentally and costing human life.
For instance, the ministry puts the direct cost of losses from landslides and earthquakes at an estimated Rwf100.3 billion, while the total economic cost from drought is estimated at about Rwf8.8 billion.
The government has been meeting these costs through both budget reallocation and with the help of donors.
However, the discussions with ARC insurance company involve the country getting a payout in the event of a disaster based on predefined cost thresholds to be determined based on a disaster monitoring and loss calculation software dubbed the “Africa RiskView.”
Mohamed Béavogui, the ARC Director- General, said the assessment, which is being jointly carried out with a local team was analysing the risk profile of the country and the average number of citizens affected in a year in a bid to determine when the insurer would be required to intervene.
Rwanda would be ARC’s next subscriber to its insurance product, which it plans to broaden. Currently, only seven out of more than 39 ARC member states contribute to the disaster risk insurance cover.
The African Union agency said it disbursed over $36 million to more than four countries namely Malawi, Mauritania, Niger and Senegal, which have been affected by the drought over the past five years.
ARC reports show that Mauritania, which paid $1.4 million for drought insurance cover in 2018, received over $2.4 million to subsidise livestock feeds for pastoralists. Malawi received $8.1 million in 2017 after having contributed $4.7 million in premiums.