African Risk Capacity Limited (ARC Ltd.), the commercial insurance affiliate of the African Union’s African Risk Capacity Group, has introduced a new range of Shariah-compliant protection solutions designed to enhance climate resilience and broaden access to financial protection across its Member States.
The new initiative establishes a non-profit facility that allows governments, communities, and insurers to obtain climate risk coverage consistent with Islamic finance principles. The announcement was made during the 7th Global Takaful and Re-Takaful Forum 2025 in Dubai, where ARC Ltd. was honoured with the “Resilient Re-Takaful Finance Innovator Award” in recognition of its pioneering role in inclusive climate financing.
ARC developed this facility to address a significant gap in climate protection for populations that have limited access to insurance products compatible with their faith. By introducing Shariah-compliant, community-based coverage, the organisation seeks to help households and institutions recover more quickly from droughts, floods, and other climate-related shocks.
At the heart of this initiative is the ARC Re-Takaful WAQF Facility (ARC ReTak), a cornerstone of ARC Ltd.’s mission to ensure that no community is excluded from Africa’s efforts to build climate resilience. Structured as a Waqf, or charitable trust, the ARC ReTak facility allows participating governments, Takaful operators, and communities to share climate-related risks through faith-based mechanisms, providing timely payouts in the aftermath of natural disasters.
Through this structure, ARC is strengthening existing risk management systems while expanding coverage to underserved populations. The organisation also aims to build the capacity of local insurers to protect pastoralists, smallholder farmers, and other vulnerable groups. Any surpluses generated through the facility will be reinvested into grants and resilience-building programmes, supporting long-term recovery and sustainable development.
The ARC ReTak facility also promotes collaboration between African and international Islamic finance institutions, bridging the gap between conventional insurance and Shariah-based financial systems. ARC is developing tailored protection solutions founded on the principles of mutual support, solidarity, and shared responsibility.
In the Takaful model, participants contribute to a shared pool to assist members in need, while Re-Takaful extends this system to help operators manage larger risks. Unlike traditional insurance, which focuses on profit-driven underwriting, Takaful and Re-Takaful operate on fairness, transparency, and collective responsibility—principles that align closely with ARC Ltd.’s development mandate.
By integrating these frameworks, ARC is expanding access to its portfolio of risk-transfer products, ensuring that faith-based communities also benefit from financial protection against climate disasters. The creation of ARC ReTak further reinforces ARC’s role as a key implementing entity within the African Union’s African Risk Capacity Group.
ARC supports its Member States in anticipating, planning for, and responding to climate disasters through sovereign and replica insurance mechanisms. The addition of a faith-based facility strengthens ARC Ltd.’s contribution to Sustainable Development Goals (SDGs) 1 and 13, as well as the African Union’s Agenda 2063.
“Africa’s resilience must be inclusive,” said David Maslo, Chief Executive Officer of ARC Ltd. “With this new facility, we are expanding the protection net to include millions who have been left out of conventional systems—not by choice, but by lack of access. This initiative represents solidarity and innovation, ensuring that every African, regardless of faith or background, can recover and rebuild after climate disasters.”
Currently in its structuring and capitalisation phase, the ARC ReTak Facility highlights ARC Ltd.’s ongoing commitment to innovation, inclusion, and faith-based finance in advancing climate resilience across Africa. By linking Islamic finance with disaster-risk protection, ARC continues to play a vital role in safeguarding the continent’s most vulnerable communities.