By Favour Nnabugwu

African Risk Capacity (ARC) has agreed to pay $10.7 million in compensation to help the Malagasy government and its citizens.

Created in 2012 by the African Union, ARC is a specialized agency whose mission is to help member states mitigate the effects of extreme climate events

After crossing both islands of the Indian Ocean (Reunion and Mauritius), the tropical cyclone Batsirai hit Madagascar hard on 5 February 2022. The disaster caused 121 deaths, displaced 61 500 people, destroyed 19 000 homes and 4 500 classrooms.

For the record, ARC has developed a parametric insurance product against tropical cyclones in East Africa in late 2020.

ARC’s parametric triggers are designed to be quickly assessed when any qualifying catastrophe or weather event occurs and so it’s encouraging to learn that this US $10.7 million payout will be made very rapidly, to help the Government of Madagascar in delivering much-needed relief and recovery funding to affected areas of the country.

Madagascar had previously received a $2.3 million ARC payout after its parametric drought insurance policy was triggered a few years ago.

Madagascar was the first African nation to take up the sovereign parametric cyclone insurance protection, in late 2020 and the decision has proved to be a prudent one, as the countries cyclone policy was triggered by Batsirai.

ARC’s Tropical Cyclone model identified that over 6 million people were exposed to recent tropical cyclone Batsirai when it slammed into Madagascar.

According to reports from the Malagasy Disaster Management Agency (BNGRC), some 61,500 people were displaced by cyclone Batsirai, while 121 people lost their lives, and 19,000 homes and 4,500 classrooms were damaged by the severe storm.

Cyclone Batsirai caused significant impacts to Madagascar in February 2022 and was the strongest tropical cyclone to strike the country since Cyclone Enawo in 2017.

Batsirai made landfall as a Category 3 storm on February 5th 2022, with sustained winds of 165 kilometers (105 miles) per hour and gusts up to 230 kilometers (145 miles) per hour, only two weeks after cyclone Ana brought deadly flooding to the country in late January and killed 55 people.