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Floodbase to Launch Cutting-Edge Parametric Flood Insurance Programs for Farmers in Mozambique and Malawi

Written By:
March 1, 2024

As reported by Bloomberg, Floodbase has been awarded a grant through the U.S. Agency for International Development (USAID) as part of the President’s Emergency Plan for Adaptation and Resilience (PREPARE) to launch parametric flood insurance programs in Mozambique and Malawi, with support from African Risk Capacity Limited (ARC Ltd.) and Global Parametrics.

Over 80% of people in Mozambique depend on agriculture for their livelihoods, and 99% of smallholder farmers in Africa are uninsured against agricultural risks. Historically, insurers have struggled to create economically viable flood insurance products across the African continent. Modeling flood risk across large, agricultural regions is challenging to do accurately, and claims management is operationally difficult and prohibitively expensive for traditional indemnity products. Both factors have limited the availability of flood insurance in emerging economies. And yet with devastating events like Cyclone Idai responsible for $700m in economic loss, it’s clear that effective climate adaptation requires new solutions that bring together innovative technology, local expertise, and a new approach to transferring and reducing risk. 

"Floodbase’s analysis found that if its program had been in place during Cyclone Idai in March of 2019, more than 10,000 farmers in the central regions of Mozambique could have received a cash payout within days of the event – helping them avoid acute food insecurity, and replant and rebuild,"  said Samantha Power, USAID Administrator, during her COP 28 speech in UAE. Administrator Power also highlighted Floodbase in her speech,The End of Climate Shocks, at the Johns Hopkins University Bloomberg Center on January 30, referencing its groundbreaking approach to extending insurance to rural Africa.

The costs of climate adaptation across the African continent are immense, and the exposure of agricultural communities to climate change poses a severe threat to economies, livelihoods, and food security. In 2021, President Biden launched the PREPARE initiative to support vulnerable countries and communities around the world in their efforts to adapt to and manage the impacts of climate change. Floodbase is one of the first grant recipients under the Adaptation Finance Window, a PREPARE initiative launched through the USAID Climate Finance for Development Accelerator that uses catalytic funding to de-risk the development and scaling of private-sector led climate adaptation approaches in developing countries. This grant will enable Floodbase to help smallholder farmers in Malawi and Mozambique avoid financial hardship in the wake of devastating floods that are becoming more frequent and intense due to climate change. Floodbase-enabled parametric flood insurance will provide financial protection for previously uninsurable risks, ensuring that events like Cyclone Idai don’t destroy the livelihoods of African farmers.

To achieve these aims, Floodbase will design risk transfer programs across Mozambique and Malawi, with Global Parametrics, a member of CelsiusPro Group, and ARC Ltd. supporting the project with underwriting, capacity building, and deployment of risk capacity. These parametric flood insurance programs are underwritten and monitored using satellite observations and machine learning, which enables insurers to trigger payouts in days rather than years. This approach eliminates the need for expensive claims management and quickly injects capital into local markets to minimize economic shock following floods.

The two parametric flood programs are just the beginning. An essential feature of this project is demonstrating the financial scalability and sustainability of parametric flood insurance in emerging markets. This approach can be applied to other agricultural risks across African markets. This model for public-private partnerships can help accelerate the success rate of humanitarian financing in increasing farmers’ resilience to climate change in Africa and across the globe.

“Our collaboration with Global Parametrics, ARC Ltd., and USAID is an excellent blueprint for bringing new parametric flood products to market; USAID funding the development of the programs derisks the venture, both risk-transfer partners will ensure the programs are financially sustainable, and ARC Ltd. brings a wealth of local distribution expertise to ensure farmers can access policies. Both Floodbase and our partners are dedicated to closing the insurance gap in Africa and scaling our approach as broadly as possible,” said Bessie Schwarz, Floodbase CEO. 

"Parametric risk transfer and risk capacity deployment are pivotal for bridging the protection gap, especially as the demand for pre-arranged financing for climate disasters intensifies. In 2023, Global Parametrics, through its Natural Disaster Fund, strengthened climate resilience for 31 million poor and vulnerable people, deploying capacity to underwrite natural disaster risks in 70 countries eligible for official development assistance. We are grateful for the collaboration with Floodbase and ARC Ltd. to strengthen the resilience of communities in Malawi and Mozambique,” said Mark Rueegg, CEO of the CelsiusPro Group.

“We're excited to partner with Floodbase to complement our portfolio of innovative parametric solutions to support flood-vulnerable communities in Malawi and Mozambique. We have deep expertise distributing insurance products across Africa, which will help ensure the largest possible participation in these Floodbase parametric programs,” said Lesley Ndlovu, ARC Ltd. CEO.

About Floodbase

Floodbase — a data provider and reporting agent — partners with re/insurers and humanitarian organizations to profitably design, underwrite, and monitor parametric flood insurance products. Built on nearly a decade of groundbreaking science, our proprietary solution continuously monitors flooding worldwide. Pairing decades of historical flood data with near real-time monitoring makes it possible to cover large corporate and public sector clients against previously uninsurable economic loss from flooding. 

Contact our team of experts at to partner on parametric flood insurance solutions that help close the flood insurance gap.


USAID is the world’s premier international development agency and a catalytic actor driving development results. USAID’s work advances U.S. national security and economic prosperity, demonstrates American generosity, and promotes a path to recipient self-reliance and resilience. USAID, along with the State Department, co-lead implementation of the President’s Emergency Plan for Adaptation and Resilience (PREPARE). 

About ARC Ltd.

The African Risk Capacity Limited (ARC Ltd.) is a financial affiliate of the African Risk Capacity (ARC), a specialized agency of the African Union (AU), an initiative designed to improve current responses to climate-related food security emergencies. 

ARC Ltd. is a mutual insurance facility comprised of its members, which have included Kenya, Mauritania, Niger, Senegal, Mali, Malawi, Gambia, Burkina Faso, Chad, Zimbabwe, Togo, Madagascar, and Zambia. The membership also includes its capital contributors who have provided premium subsidies, including USAID, FCDO SWISS, KFW/BMZ, IFAD, AFDB, WFP and STARTNETWORK.

About Global Parametrics

Global Parametrics, a member of the CelsiusPro Group, assists private and public organizations in understanding, managing, and mitigating the financial impact of climate risk and extreme weather events, with a particular focus on low-and-middle-income countries. Global Parametrics helps organizations and communities build climate resilience through innovation in parametric risk transfer and the deployment of risk capacity. Global Parametrics’ solutions leverage the risk capacity of the Natural Disaster Fund (NDF), supported by paid-in capital from the UK’s Foreign, Commonwealth and Development Office (FCDO) and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), along with committed risk share from Hannover Re.