Appleby acted as Bermuda counsel to African Risk Capacity (ARC), a specialised agency set up by the African Union (AU), on establishing a specialist hybrid mutual insurance company to help AU member states become more resilient to extreme weather events and to protect insecure food populations in light of climate change.
Appleby advised on the incorporation and registration of ARC Insurance Company Limited (ARC Ltd), a Bermuda-domiciled company, established to provide insurance coverage against drought and other weather-related risks for a group of countries initially comprised of Kenya, Mauritania, Mozambique, Niger and Senegal. Germany and the United Kingdom are founding members of the mutual and contributed the initial capital.
ARC Ltd has been initially capitalised with US $135 million in drought insurance coverage tailored to the specific needs of the five insured countries. Additionally, US $55 million will be provided via global reinsurers and weather risk markets in order to cover the risks it is taking on from the participating countries.
The Appleby team was led by Insurance Partner Brad Adderley in the Bermuda office, and assisted by Associate Seth Darrell on the Insurance team and Counsel Martin Ouwehand on the Litigation & Insolvency team.
Mr. Adderley commented: “Climate change is a global concern and at the forefront for governments who are grappling with how to respond to such events. In the last few years, our team has advised on a variety of insurance transactions structured through special purpose vehicles related to hurricane losses and even agriculture-related exposures. This transaction with ARC is of great significance, further reflecting an increased global focus on the importance of assessing and responding to weather-related risks, particularly affecting those vulnerable populations from extreme events.”
ARC was established in 2012 as specialised agency of the AU to help AU member states improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters.
External partners included Stroock Stroock & Lavan LLC, Marsh IAS as Insurance Manager in Bermuda, and Willis Group as reinsurance broker.
Media enquiries: Kanelli Marsh