Investment manager Nephila Capital has unveiled plans to provide drought protection to farmers in a number of African countries.
The deal, which was executed through Nephila’s Syndicate 2357, is the first weather risk transfer transaction written by the syndicate.
Nephila joins a panel of risk capacity providers that collectively provided $72.5 million of coverage working with Willis through the African Risk Capacity (ARC) initiative, which is a sovereign pool of funds that compensates African Union governments when adverse weather and natural catastrophe events occur.
The drought reinsurance programme, which is in its second year, will last for twelve months up until 2016. Farmers in nine countries across Western and Eastern Africa receive compensation from their country within days if crop yields are low due to lack of rain.
“Nephila is proud to support the ARC in its drought risk management program, as the latest step in over fifteen years of providing weather risk transfer protection on behalf of our underlying investors,” said the investment manager.
“We launched our first dedicated weather fund in January 2005 and have deep experience in the sector. Working with Willis and the ARC, through Lloyd's of London and alongside other capacity providers in this market, on such a transaction is another encouraging sign that the weather risk transfer market will continue to grow,” it added.
Nephila Capital, Willis, Bermuda