Parametric Insurance / Risk Pools (for flooding and coastal hazards)
Extreme rainfall, sea-level rise, and storm surges create recurrent losses for communities and governments across the Gulf of Guinea. Traditional insurance often fails to deliver timely or adequate support in these contexts. Parametric insurance, however, offers a powerful alternative: payouts are triggered by pre-defined thresholds (e.g., rainfall intensity, tide levels, or wind speed), enabling rapid liquidity for disaster response. GoG-RRI aims to help design city-level parametric products—for example, in Lagos, Accra, and Cotonou—while promoting membership in regional risk pools to reduce premium costs. By embedding parametric triggers into social protection systems and municipal contingency plans, GoG-RRI will ensure that vulnerable populations benefit directly and quickly, reducing recovery times and economic losses.
- What it is: Rapid-payout policies triggered by rainfall, river level, storm surge, or wind thresholds; pooled at the regional scale to lower premiums.
- Why it fits: West Africa’s coastal flooding is frequent; parametric triggers speed liquidity for emergency response and early recovery.
- Proof of concept: African Risk Capacity (ARC) launched Africa’s first flood risk parametric product; ARC Ltd provides pooled parametric cover to AU members and organizations. arc.intarcltd.org
- GoG-RRI angle: Pilot city-level parametric covers (e.g., Accra, Cotonou, Lagos) tied to tide-gauge/satellite data; pair with contingency plans and social-protection disbursement rails.
