The Danish Red Cross is piloting a parametric flood insurance program in Malawi with the support of the African Risk Capacity (ARC) as it looks to develop a sustainable solution to make humanitarian funding faster when disaster strikes.
The Danish Red Cross has been working with parametric risk transfer and other innovative financing structures for a number of years. Back in 2021 the organisation was behind the Dunant Re IC Limited (Series 2021-1) catastrophe bond, which was the first to transfer pure volcanic eruption risk to the capital markets.
Flood risk is a significant peril that activates Red Cross funding and by working to develop a parametric insurance solution, the organisation is again looking to develop a responsive financing solution using insurance market techniques.
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