MICROCAPITAL BRIEF: Guy Carpenter Reinsurance to Receive $1m Grant from International Finance Corporation (IFC) to Develop Agriculture Microinsurance in Mozambique

Guy Carpenter and Company, a reinsurance company headquartered in New York City, recently announced that it will receive a grant from the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, in the amount of USD 1 million to develop agriculture microinsurance in Mozambique. Guy Carpenter will work with Risk Management Solutions (RMS), a US-based company that specializes in managing catastrophic risk, to design and implement affordable, weather index-based insurance for flood and drought risk. While RMS will focus on risk modeling to price the insurance products, Guy Carpenter’s role will be to develop the local market and build the capacity needed to support the system.

Alex Bernhardt, head of Guy Carpenter Micro Risk Solutions, explained that access to crop insurance will help farmers “protect themselves from potentially devastating flood- and drought-related losses and assist them in accessing the capital they need to invest in inputs and production to improve crop yield and food security.” Financial details are not available for Guy Carpenter or RMS.

By Julie Moksim, Research Associate

About the International Finance Corporation (IFC): The International Finance Corporation (IFC) is a member of the World Bank Group that was created to support private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses and services. IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reported net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent, total investment mobilization of USD 18.4 billion and 528 projects.

About Guy Carpenter and Company: Guy Carpenter is a reinsurance intermediary that is headquartered in New York City and has offices in Europe, Africa, Asia and elsewhere in the Americas. The organization is involved in insurance types that include agriculture, marine, energy, medical, professional, property, terror risk and workers’ compensation. Guy Carpenter’s major departments include GC Analytics, a group that helps clients quantitatively assess their risks; GCFac, which helps insurance agencies develop markets and leverage market information; GC Micro Risk Solutions, which specializes in the microfinance industry; and GC Securities, which provides investment banking services to the insurance industry. The organization’s financial information is not publicly available.

About Risk Management Solutions (RMS): RMS is a provider of products, services and expertise for the quantification and management of catastrophic risk. In 1988, RMS was founded at Stanford University in the US state of California. The organization originally offered technology and services for natural disasters such as earthquakes, hurricanes and windstorms, and it now also is involved with protecting against acts of terror. Approximately 400 insurers, reinsurers, trading companies and other financial institutions use RMS models. Financial information for RMS is not available.

Sources and Additional Resources:

Insurance Journal: “Guy Carp to Develop Agriculture Microinsurance for Mozambique Farmers”, March 23, 2011, http://www.insurancejournal.com/news/international/2011/03/23/191211.htm

MicroCapital.org Brief, March 22, 2011: Financial Services Board (FSB) of South Africa Launches New Microinsurance Framework in Effort to Improve Financial Inclusion https://www.microcapital.org/microcapital-brief-financial-services-board-fsb-of-south-africa-launches-new-microinsurance-framework-in-effort-to-improve-financial-inclusion/

MicroCapital’s Microfinance Universe Profile: Guy Carpenter and Company

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Guy+Carpenter+and+Company

MicroCapital’s Microfinance Universe Profile: Risk Management Solutions (RMS)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Risk+Management+Solutions+%28RMS%29

MicroCapital’s Microfinance Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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