A South Africa based insurance company has disclosed that it is yet to pay over K5 billion to Malawi government following the drought that hit the country as per the policy of the drought insurance Malawi bought from the firm.
The African Risk Capacity (ARC) Insurance Limited is yet to make the payment after completion of assessment on the drought.
According to the company, the payment has been delayed due to conflicting reports on the models used to come to the conclusion on the magnitude of the effects that resulted from the persistent dry spells which led to food shortages among Malawians.
“The policy did not initially trigger a payout, because the model indicated a low number of people affected by the drought. However, the government’s estimate of the impacted population in Malawi was much higher, suggesting a discrepancy in the results of the model,” reads part of the ARC statement made available to Malawi24.
Meanwhile, ARC has disclosed that funds are to be disbursed for Malawi upon showing plan on how the money will be in used.
The ministry of finance has since welcomed the development arguing that it will complement government efforts in mitigating the effects of the 2015/16 drought.
Malawi bought a parametric drought insurance policy from ARC Ltd for the 2015/16 agricultural season after being hit by floods early January in 2015.