African Risk Capacity Limited (ARC Ltd) and Klapton Reinsurance Limited (Klapton Re) have signed a Memorandum of Understanding (MoU) to establish a new partnership aimed at expanding access to parametric climate insurance solutions across Africa.
Together, both entities aim to expand the availability of practical, locally-adapted insurance products, addressing the increasing vulnerability of communities to climate-related risks.
Under the MoU, the two firms will co-develop and roll out new insurance products tailored to the needs of farmers and low-income families, helping them to recover more quickly from climate-related losses.
According to the announcement, the first programme under this collaboration is set to launch in Zambia in November 2025, which will focus on protecting rangeland areas vulnerable to drought.
“The initiative comes at a time when the effects of climate change are being felt more widely and severely across Africa. By pooling technical know-how, regional networks, and local implementation capacity, ARC Ltd and Klapton Re aim to expand the reach of climate insurance in ways that are responsive to both immediate recovery needs and long-term resilience goals,” the two firms explained.
In addition, the partnership will also support local insurers by providing technical expertise in risk assessment and product development, both pre- and post-disaster.
The two organisations also plan to provide training for brokers, agents, and other key stakeholders in order to further strengthen the overall insurance ecosystem.
As well as this, ARC Ltd and Klapton Re will also collaborate on awareness campaigns and outreach efforts to promote climate insurance adoption. Digital innovations, including mobile-based loss assessment tools, are also being explored to enhance product efficiency and transparency.
Lesley Ndlovu, Chief Executive Officer of ARC Ltd, commented: “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.”
Kudzai Bingepinge, Chief Executive Officer of Klapton Re, said: “At Klapton Re, we see this collaboration as a unique opportunity to combine innovation with tailor made reinsurance capacity. By partnering with ARC Ltd, we’re enhancing our ability to deliver relevant and impactful insurance solutions, starting in Zambia and expanding across the continent. It’s about making climate protection real and reliable for the people who need it most.”
