Africa: Drought triggers ARC insurance payout
The catastrophe insurance model is tailored to African climate issues, developed by the African Risk Capacity (ARC), a Specialized Agency of the African Union, and its affiliated mutual insurance company, ARC Ltd. The inaugural pool was set up in 2014 to help Member States build resilience to extreme weather events and protect food insecure populations. Coverage for tropical cyclones and floods will be available in 2016.
By purchasing parametric drought insurance policies last year, Kenya, Mauritania, Niger and Senegal became the first African countries to embrace this new model of innovative funding, taking a major step in transforming the disaster response paradigm on the continent
Payouts are made based on calculations using ARC’s in-house drought monitoring and loss calculation software, Africa RiskView. ARC and its Member States work in partnership to develop country-level contingency plans based on existing and scalable government programs. Prior to payouts being made, governments must submit a Final Implementation Plan, which is certified by the ARC Governing Board’s Peer Review Mechanism.
Dr. Richard Wilcox, Founding Director General of ARC Agency noted, “This is a transformative moment in African food security demonstrating the potential for cost effective disaster financing. ARC has the potential to transform disaster risk management on the continent. With the ability to scale to a multi-billion dollar portfolio, ARC could offer coverage to 20 plus countries by 2020.”
For more information:
Catherine Robar
African Risk Capacity
Tel: +251 (0)911 50 22 67
Email: catherine.robar@africanriskcapacity.org
www.africanriskcapacity.org