African Risk Capacity (ARC) is a specialised agency of the African Union which helps African Union member states manage risks through insurance. The ARC Replica programme also allows non-governmental organisations like Start Network to work side-by-side with governments to manage these risks.
This new way of funding is ideal for disasters such as food insecurity caused by drought, cyclones or floods. It is possible to predict these months in advance, so funding can be put in place before they happen. This means that humanitarian assistance comes as soon as it is needed.
We are currently using ARC Replica in Senegal, Somalia and Zimbabwe.
How it works
African Union’s member states can purchase “parametric” insurance policies from ARC Ltd. This type of policy makes pre-specified payouts when pre-agreed scientific triggers are met.
Non-governmental partners like Start Network can then purchase a replica insurance policy under the same terms and conditions as the Government to increase coverage of the at-risk population.
Case study: ARC Replica in Senegal
Start Network was one of the first designated partners of the ARC Replica initiative in 2018, along with the World Food Programme.
In July 2019, Start Network and the government of Senegal each purchased an insurance policy against drought. When rainfall levels dropped below a pre-defined threshold, we each received payouts to implement timely and coordinated action to protect communities at risk.
The pre-agreed triggers were met in November 2019 and a payout of US $12.5 million was made to the Government of Senegal. Another US $10.6 million was paid to Start Network – the largest-ever funding allocation to civil society for early humanitarian action.
Throughout 2020, six Start Network members worked alongside the government of Senegal to deliver assistance to Senegalese families ahead of a severe food insecurity situation caused by drought. They were: Action Against Hunger, Catholic Relief Services, Oxfam, Plan International, Save the Children and World Vision.
The agencies distributed enriched flour and made cash transfers to more than 335,000 people across seven regions. This enabled families to protect livestock and other valuable assets and avoid resorting to negative coping strategies, such as skipping meals or sending children to work instead of school. The COVID-19 pandemic made the situation worse so agencies also focused on broadcasting hygiene and sanitation messaging to help mitigate the spread of the virus.
Meanwhile, the Senegalese government used their payout to support regions not covered by Start Network programming.
Our funders and partners
ARC Replica is run in partnership between Start Network, African Risk Capacity (ARC), African Union member states, including the governments of Senegal, Zimbabwe and Somalia, and the World Food Programme.
It is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) through the German Development Bank, Kreditanstalt für Wiederaufbau (KfW) and the UK's Foreign, Development and Commonwealth Office.