ARC returns to profit in 2023 as product expansion continues

African Risk Capacity (ARC) Ltd., the parametric insurer and financial affiliate of the ARC Group, has released its 2023 annual report, revealing a net profit of $13 million, a significant recovery from a $29 million loss over the past two years.

According to the firm, the net profit was largely driven by expansion and diversification efforts across Africa.

ARC reported gross written premiums of $56.1 million, gross earned premiums of $46.8 million, and a net income of $14.2 million.

A key contributor to this growth was the expansion of ARC’s non-sovereign business segment, which saw gross written premiums of $14.78 million. This was bolstered by new policies, including The World Bank Malawi social protection policy with a gross premium of $10.25 million for two years, The World Bank Republic of Djibouti’s protection policy with a gross premium of $2 million for five years, and Drive Pool 9 endorsement policies with a gross premium of $1.45 million.

Throughout 2023, ARC strengthened strategic partnerships, enhancing its ability to help African nations manage climate and health risks. Notable milestones included renewing two seasons of The World Food Programme-Madagascar policy, retaining a 95% share, and renewing the One Acre Fund Kenya policy, increasing ARC’s share from 4% to 10%.

Lesley Ndlovu, CEO of ARC, stated, “From covering 12.9 million people in 2014, we protected 26.4 million in 2023. We have also expanded our footprint to 39 member states.”

Ndlovu added, “We are pleased that behind the figures are communities that have benefited. We are also encouraged to see an increase in the number of countries utilising insurance as part of their disaster risk financing matrix.”

Ange Chitate, COO of ARC, noted, “Pioneering innovative products and risk transfer solutions tailored to individual countries’ changing needs are central to our activities.

“With the increasing severity and frequency of natural disasters, this phenomenon highlights the importance of having multiple financial instruments to complement the insurance we provide.”

In 2023, ARC introduced several groundbreaking products, including Africa’s first flood risk insurance. The company also launched a multi-year, multi-peril insurance product in Djibouti, covering the country’s primary risks of drought and heavy rainfall.

ARC expanded its offerings into social protection with a new insurance mechanism in Malawi. Additionally, the company introduced the first-ever postgraduate Africa Scholarship Programme in partnership with Milliman Inc. as part of its corporate social responsibility efforts.

Looking ahead, ARC aims to extend its climate and health insurance solutions to all 55 African Union member states by 2034, offering each nation customised products that address their specific risks.

Ndlovu emphasised, “As the global reinsurance market hardens, costs rise while capacity shrinks. Keeping reinsurance expenses in check will be crucial for maintaining affordable premiums for member states.

“At the same time, we will automate and streamline processes to improve efficiency as our business volumes increase.”

The company also plans to enhance its communication, engagement, and advocacy efforts, aiming to raise global awareness of its mission.

“With concerted effort across these priority areas, we can take our vision to the next level and create an even more substantial impact for African citizens. We have built strong momentum, and now is the time to accelerate,” Ndlovu concludes.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.