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African Risk Capacity Limited (ARC Ltd.) and the United States Government (USG) have entered into a landmark USD11.7 million partnership to safeguard food security and strengthen climate resilience in Africa by increasing access to parametric insurance.
African Risk Capacity Limited (ARC Ltd.) and the United States Government (USG) have entered into a landmark USD11.7 million partnership to safeguard food security and strengthen climate resilience in Africa by increasing access to parametric insurance. The project aims to protect vulnerable smallholder farmers facing increasing climate change-related disasters while assisting African governments to better respond to climate risks.
Parametric insurance provides rapid payouts based on pre-agreed triggers, allowing timely responses to natural disasters. The USG funding will enable ARC Ltd. to scale up technical assistance in-country and increase coverage across Africa over the next three years.
The project has two primary objectives. Firstly, governments will be assisted with capacity building to manage climate change-induced disasters through the effective use of parametric insurance. Secondly, the project seeks to increase the uptake of parametric insurance through close cooperation with the African Union and regional economic communities to encourage adoption. It will also focus on aligning domestic policy frameworks with regional policies to embed parametric insurance in existing climate adaptation frameworks.
Increasing climate change impacts requires responsive diversification to ensure the project’s long-term sustainability. Plans include developing demand-driven micro/meso insurance and diversifying beneficiaries, such as pastoral farmers locally and humanitarian organisations internationally.
Various activities have been identified to achieve the objectives. On the technical side, ARC Ltd. will further refine and develop new products for member states with a focus on drought, flood, and tropical cyclone models. ARC Ltd. will also work more extensively with technical and financial partners, UN agencies, international financing institutions, and universities to identify how data can be used for increased evidence-based policy decision-making and impact measurement.
Read Also:
https://trendsnafrica.com/usd-215-mn-wb-support-to-south-sudan-for-climate-shocks-mitigation/
https://trendsnafrica.com/africas-battle-with-natural-disasters/
ARC Ltd. has set an ambitious goal of protecting the lives and livelihoods of 700 million vulnerable people in Africa by 2034. The partnership with the United States Government, and others, will help in achieving this goal. It also demonstrates the commitment of developed nations to building the resilience of the global south to withstand climate disasters, stated Lesley Ndlovu, CEO of ARC Ltd.
