Authors: Antoine Bavandi Dorra Berraies
Gallagher Re’s Public Sector & Climate Resilience Solutions global practice recently led a study tour to Rabat in Morocco, in partnership with the World Bank. The goal of the Rabat study tour in July was to help other francophone African countries devise, develop and implement cost-efficient solutions that strengthen their own resilience to a broad range of climate and disaster risks.
The nations that joined the tour are among those most affected by weather-related catastrophe events, but also are the most committed to improving food security and the wider resilience to disasters of their people and communities. With Morocco’s story having the potential to be replicated or reimagined elsewhere, our Public Sector & Climate Resilience Solutions global practice wanted to give these nations insights on how to build their own success stories.
Knowledge-sharing objective
Delegations of key decision-makers and representatives from ministries of finance and Solidarity, public solidarity funds and insurance regulators from Burkina Faso, Democratic Republic of Congo, Niger and Senegal travelled to Rabat in July for a four-day knowledge-sharing event.
The study tour was part of the strategic financial advisory program Gallagher Re undertook after its World Bank appointment to help develop agricultural insurance and strengthen the financial resilience of several francophone African countries against climate disasters. This program is funded by the World Bank’s Global Index Insurance Facility (GIIF), which aims to address the scarcity of affordable insurance protection against weather-related and other catastrophic risks in Africa.
Morocco: The case study
Morocco’s success in this area is centred on the adoption of an innovative disaster risk insurance regime (Law No. 110-14), which became effective in January 2020. This law established the Solidarity Fund for Catastrophic Events, or Fonds de solidarité contre les événements catastrophiques (FSEC) — a sustainable, public-funding mechanism that provides coverage to the uninsured and most vulnerable of households. It also helped expand insurance policies — backed by domestic insurers and reinsurers — to include catastrophe risk to cover damage and bodily injury for insured car owners, homeowners, businesses and industries.
Since January 2020, two reinsurance transactions for FSEC, supported by Gallagher Re, have been finalized to provide quick liquidity (cash flow) from international markets in the case of a severe catastrophe.
During the four-day event, delegates participated in workshops, to understand:
- The fundamentals of disaster risk financing;
- The role and rationale for using and structuring different financial instruments
- How to build their risk understanding and assess their financial gap
- The importance of always taking a holistic view of risk to optimize the use of public funds and select the most appropriate insurance instruments that fit with the country priorities and needs
The delegations also met with and heard from the key protagonists behind Morocco’s public-private regime, learning from the experience of others how they could shape their own national strategies, overcome challenges and enlarge the scope of perils and population covered.
Meetings with the insurance federation and domestic reinsurers provided further insight and opportunities to gain valuable knowledge. It also helped demonstrate the potential synergies between the public and private sectors and benefits with regard to climate and financial resilience at the macro, meso and micro levels.
Global expertise: The trusted advisor view
Gallagher Re’s Public Sector & Climate Resilience team considers knowledge sharing fundamentally important for emerging countries to strengthen financial resilience and responsiveness to climate-related and other catastrophic events. Gaining first-hand insight into other nations' experience, challenges and successful collaborations can help developing countries more quickly advance their disaster risk financing strategies and develop public-private sector solutions.
Its goal for the study tour, with that of our partner the World Bank, was to help the guests advance their national agendas, with the goal of protecting their vulnerable populations in the most cost-efficient way possible.
According to the Public Sector & Climate Resilience Solutions team, Morocco’s story has the potential to be replicated or reimagined elsewhere, and so the team wanted to give these heterogeneous nations the fundamental knowledge and tools to build their own success stories.
Each country is at a different stage of its journey but shares many common goals. Ultimately, Gallagher Re’s objective is to use its expertise to support emerging countries to become more financially sophisticated, sustainable and optimistic in their response to disasters.
Bringing together the key decision-makers and authorities from four francophone countries to learn from Morocco’s success has been a privilege and the team hopes the study tour has given the delegates the knowledge to apply directly to their circumstances.
The team believes this study tour has contributed, in a practical way, to raising awareness and highlighting the benefits of improving risk understanding and data availability in West African countries and how they are key to prioritizing, targeting, and optimizing the use of public funds and risk transfer solutions.
