The African Risk Capacity (ARC)

The African Risk Capacity (ARC) provides index insurance against droughts to African Union member states. As a distinctive feature of ARC, participating governments have to prepare contingency plans prior to taking out insurance. These plans determine how insurance payouts will be used when the insurance is triggered. By combining early warning and contingency planning with an insurance mechanism, ARC provides liquidity shortly after a catastrophic event, while the pre-planned activities ensure that payouts are used quickly and effectively, mitigating the detrimental impacts of disasters for the poor and vulnerable. Currently, ARC is developing two new insurance products against floods and tropical cyclones.

In the period 2016/17, Burkina Faso, Senegal, Niger, the Gambia, Mali and Mauretania took out insurance from ARC. Since its inception in 2014, ARC has paid out more than 34 million USD to four drought-affected countries: Mauritania, Niger, Senegal and Malawi. The funds, disbursed ahead of the UN appeal, were used to deliver rapid relief to affected populations.

ARC can reach up to 150 million beneficiaries, based on committed funding under InsuResilience, by 2020.

Further information: http://www.africanriskcapacity.org/

ARC REPLICA

ARC Replica is bringing humanitarian actors into ARC’s government led risk management approach. Humanitarian institutions (e.g. NGOs) can match country policies and take out insurance, so that international resources are used cost-effectively, while also ensuring that country structures and humanitarian aid organizations work together more efficiently.

Further information: http://www.africanriskcapacity.org/replica/