The floodwaters that submerged streets and homes in Accra on May 18th have amplified the critical need for urban insurance solutions in Ghana. As families were displaced and businesses ground to a halt, the disaster served as a stark reminder of the country’s vulnerability to climate-related shocks. Experts like Dr. Amina Sammo, UNDP Ghana’s Specialist in Insurance and Risk Finance, argue that a parametric flood insurance scheme represents not just a potential remedy, but a “complete, ready-to-deploy solution” that could dramatically mitigate the impact of future deluges. This article delves into the specifics of this proposed insurance model, exploring its mechanics, potential benefits, and the steps required to activate it, with a focus on transitioning from reactive disaster response to proactive resilience.

Accra’s vulnerability to flooding is well-documented. The May 18th floods brought the city to its knees, with submerged roads cutting off communities and floodwaters inundating homes, leaving many families displaced. Unfortunately, this was not an isolated incident, Accra has a history of grappling with severe flooding. Experts suggest that the impact of these recent floods could have been significantly lessened had a flood insurance mechanism been in place and activated.

The proposed parametric flood insurance model offers a swift and targeted approach to disaster relief. Unlike traditional insurance, which requires lengthy assessments of individual damages, parametric insurance relies on pre-defined thresholds, such as rainfall levels or flood heights. When these thresholds are breached, payouts are automatically triggered, ensuring a rapid injection of funds into affected areas. Dr. Amina Sammo emphasizes the readiness of this solution, stating, “This is not a concept — it’s a complete, ready-to-deploy solution.” The benefits of such a system are manifold, providing emergency funds for immediate needs such as shelter and food, as well as resources for clearing drains, supporting affected traders, and repairing vital infrastructure. The speed of fund disbursement, typically within 7-10 days, is crucial in the immediate aftermath of a disaster.

The National Disaster Management Organisation (NADMO) already has a contingency plan that aligns well with the proposed insurance model. Further bolstering this initiative is the Insurance Resilience Solutions Fund (ISF), which has committed USD 2 million over three years to subsidize insurance premiums. This financial support is designed to alleviate the cost burden and encourage widespread adoption of the insurance scheme. Despite these promising elements being in place, the scheme sadly remains dormant, its potential unrealized.

UNDP Ghana has issued an urgent call to action, appealing to key stakeholders to embrace and implement the flood insurance scheme. These stakeholders include the Ministry of Finance, NADMO, the National Insurance Commission, metropolitan authorities, and various development partners. Specific actions required include the acceptance of ISF premium support, the signing of implementation agreements, and the integration of the insurance mechanism into existing disaster response plans. Furthermore, UNDP Ghana recommends piloting the scheme in Accra, with a view to scaling it to other vulnerable cities such as Kumasi, Takoradi, and Tamale. Simultaneously, there is a need to raise public awareness about the role of insurance as a critical tool for disaster risk financing.

Ghana’s history is marked by catastrophic events, including the devastating June 3, 2015 flood and fire disaster, which highlighted the country’s vulnerability to natural hazards. Too often, the response to these events has been reactive, focusing on cleanup and rebuilding after the damage is done. The time has come for a paradigm shift towards proactive resilience-building, where disaster risk is managed and mitigated before it strikes. Dr. Sammo powerfully states, “The May 2025 floods should be the turning point…We cannot afford to keep rebuilding after every storm. We must protect before the next one hits.”

The May 2025 floods in Accra offer a sobering lesson and a clear call to action. With a ready-to-deploy parametric flood insurance scheme at its disposal, Ghana has a tangible opportunity to protect its urban centers from the growing threats posed by climate change. By taking decisive steps to implement this scheme, Ghana can break free from the cycle of disaster and rebuilding, and instead forge a future of proactive protection and enhanced resilience. This should be the moment when Ghana transitions from planning to protection, ensuring a safer and more secure future for its citizens and its economy.