Design of a flood cover insurance for public assets in Ghana

Within the project "Developing Risk Management Approaches for Climate Risks" the Strategic Partnership between the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and Allianz Reinsurance prepared the ground for introducing flood risk transfer solutions for public assets within an Integrated Disaster Risk Management (IDRM) approach for three municipalities in Ghana.

Developing an appropriate insurance product is vital in coping with flood risk damages. Therefore, this risk transfer component was one of the key parts of the project. Based on extensive data collection and risk modelling activities within the project, Allianz Re was able to design an indemnity-based flood cover for public assets of three municipalities. It covers the aggregated losses of all insured assets managed by a municipality that are hit by a severe single flood event. This insurance product is not only relevant for GAMA – as it would be the first of its kind to be implemented in Ghana – but also acts as a serious risk financing route for other regions that regularly and increasingly experience severe flooding.

This InFocus document outlines the challenges, solutions and lessons learned in the process of designing such a flood cover insurance product for publicly managed assets.