African risk capacity payouts to exceed $25 million
THE African Union’s African Risk Capacity’s affiliated mutual insurance company, ARC Ltd, is set to make claim payouts of more than $25 million to three of its member states belonging to its catastrophe insurance pool, which was recently established to help them become more resilient to extreme weather events and protect food insecure populations.
The ARC’s announcement said: “Defined growing seasons in three Sahelian countries, Niger, Mauritania and Senegal, have recently ended and payouts totaling over $25 million will be made by ARC Ltd based on parametric calculations using ARC’s in-house drought monitoring and loss calculation software, Africa RiskView (ARV).
“Following certification of each Government’s Final Implementation Plan (FIP) by the ARC Governing Board’s Peer Review Mechanism, payouts will be made in the coming week. FIPs define the use of the insurance payout to provide immediate support to food-insecure populations.”
Robert Piper, the UN Regional Humanitarian Coordinator for the Sahel, commented: “These first payments by ARC represent a milestone in Government leadership and financial innovation for emergency response across the Sahel.”
The bulletin also explained that an “initial review of ARV modelled impacts suggests that the number of food-insecure people has been accurately captured; indeed, 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. ARC Ltd payouts are parametric so quickly disburse and have impact; that impact can be more than four times greater than traditional drought response. In the case of the Sahel, payouts will benefit several million food-insecure people through programs targeted to the specific needs of each country.”
Dr. Lars Thunell, Chairman of ARC Ltd’s Board of Directors commented: “We are pleased that ARC’s support of Governments’ comprehensive planning for and financing of drought risk is being proven so quickly to be a paradigm shift in the way drought is managed across the African continent.”