Johannesburg, South Africa (PANA) – ARC Insurance Company Limited will pay US$ 25 million in drought insurance claims to three countries in the Sahel this month – Mauritania, Niger and Senegal.
The three countries which paid a combined premium of US$8 million, will use the payout to mobilize early interventions in response to drought based on pre-approved contingency plans.
The catastrophe insurance model is tailored to African climate issues, developed by the African Risk Capacity (ARC), a specialized agency of the African Union (AU), 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
