The catastrophe insurance model was developed specifically for unique African climate issues 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.
"This African-owned approach is addressing specific country-level climate change concerns, decreasing reliance on external aid, and promoting a sustainable solution to one of our continent's biggest challenges." said Dr. Ngozi Okonjo-Iweala, Nigeria's Minister of Finance and Chair of ARC's Governing Board.
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
Robert Piper, the UN regional humanitarian coordinator for the Sahel, acknowledged."These first payouts by ARC represent a milestone in Government leadership and financial innovation for emergency response across the Sahel. ARC's information and action is spearheading what will be a substantial global emergency response over the coming months to mitigate what could otherwise become a major food security crisis."...