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$10M INSURANCE PAYOUT ANNOUNCED FOR AID CHARITIES TO ACT EARLY TO MITIGATE DROUGHT IN SENEGAL

  • by Helen James
  • 22 Sep 19

Credit: Atmospheric Research CSIRO | commons.wikimedia.org


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Start Network has today confirmed that the biggest ever funding allocation to civil society for early humanitarian action has been announced. The money will enable aid agencies to offer life-saving support to people before an oncoming drought in Senegal leads to a famine, which threatens people’s lives.

The payout has been triggered through a ‘parametric’ insurance policy, provided by African Risk Capacity, which has been developing products with African governments, to disburse funds early, based on pre-agreed scientific triggers. This is a new way of working and unlike the current model in which aid agencies are reliant on funding agreed after a crisis has taken place. 

The Start Network, a global network of aid agencies, signed up to the policy because it believes that pre-emptive disaster financing could revolutionise the aid sector and catalyse a new way of preparing for crises, helping to create more resilient communities.

The organisations that are in line to receive funds well before the worst effects of a drought are felt, include Catholic Relief Services, Action Against Hunger, Oxfam, Plan International, World Vision and Save the Children. The early payout will enable farmers and their families to protect livestock and other valuable assets. The Start Network envisages it could help more than 200,000 people through cash interventions. Even more people could be helped through nutrition or agricultural projects. 

The payout has been confirmed by African Risk Capacity, which helps African Union Member States plan, prepare, and respond to extreme weather events and natural disasters. A payout of $12M will also be made to the Government of Senegal, and the Start Network’s response will complement the response of the Government, ensuring even the most vulnerable families are protected.

Christina Bennett, Start Network’s incoming CEO said: “We are delighted that our work to put this policy in place, will now mean an early release of funding, so we can work alongside the Government to help people who may suffer during this major drought. This way of working is a potential game-changer for the sector. Slow aid funding is one of the biggest structural problems in disaster response efforts, and this costs lives. Studies show that early action means more lives saved. And that’s exactly what we will be able to do.”

The system set-up to analyse the data and trigger the payout alerted the Government and Start Network to irregular and insufficient rainfall in the western regions of Senegal in August. The system has warned that a minimum of 964, 000 people will be affected by the rainfall deficit this year. The number of people to be affected was among the pre-agreed parameters of the insurance policy, (the policy only pays out in severe cases, when a large number of people are to be affected). This lead to the insurance payout being triggered.

The policy will payout in November and work to help families cope with the drought will begin in January.

The initiative, known as ARC Replica is run in a partnership between the Start Network, the Government of Senegal, the African Risk Capacity (ARC), and the World Food Programme (WFP) and the Start Network, funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) through the German Development Bank, Kreditanstalt für Wiederaufbau (KfW). ARC Ltd is also jointly funded by KfW on behalf of BMZ and the UK’s Department for Internal Development. 

Read more about African Risk Capacity.

Read more about ARC Replica.

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Insurance Risk Financing

  • by Helen James

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