African Risk Capacity (ARC) and Klapton Re have forged an alliance to enhance climate risk protection in Africa.  

Entering a memorandum of understanding (MOU), the collaboration between the two entities seeks to combine the expertise of a development insurer with the market presence of a private reinsurer to extend climate insurance coverage. 

ARC and Klapton Re aim to deliver climate insurance solutions to small-scale farmers and families at risk from natural disasters such as droughts and floods.  

By leveraging ARC’s data-driven insurance models and Klapton Re’s regional networks, the initiative plans to introduce insurance products tailored to the needs of these “vulnerable” groups. 

Under the MOU, the companies will collaborate on developing and introducing new insurance products for farmers and low-income households, enabling them to recover from climate-related losses. 

The first initiative under this partnership will be launched in Zambia by November 2025, targeting rangeland areas prone to drought.  

Additionally, the two organisations will provide support to local insurance companies by sharing technical expertise in risk assessments and product development. 

The collaboration also includes plans to train brokers, agents, and other key industry participants to strengthen the insurance ecosystem.  

Working with regulatory bodies to ensure that all products meet national standards and are introduced responsibly is also a priority for the partnership. 

Additionally, they aim to explore digital innovations, such as mobile apps for automating crop damage assessments, to improve the accuracy of climate insurance for all parties involved. 

ARC CEO Lesley Ndlovu stated: “This partnership is about complementing each other’s strengths to drive real change. ARC brings expertise in designing climate insurance solutions tailored to African needs while Klapton Re brings deep market knowledge and access to communities on the ground. Together, we can bring climate risk insurance to scale and ensure no one is left behind.” 

Klapton Re CEO Kudzai Bingepinge said: “At Klapton Re, we see this collaboration as a unique opportunity to combine innovation with tailor-made reinsurance capacity. By partnering with ARC, we’re enhancing our ability to deliver relevant and impactful insurance solutions, starting in Zambia and expanding across the continent.”