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New insurance policy will protect up to 160,000 people in Senegal from drought

  • by Helen James
  • 07 Oct 21

Credit: African Risk Capacity

News Article

Start Network has signed a climate risk insurance policy that will protect up to 160,000 people in Senegal from the effects of drought. One of the first of its kind, the policy will enable aid agencies to offer life-saving support to people in Senegal as soon as a drought is predicted, helping to prevent famine.

The $1.5 million USD policy, signed by Start Network (and its member partners including Catholic Relief Services, Save the Children, Action Against Hunger, Plan, Oxfam and World Vision), and provided by African Risk Capacity, is built on ‘parametric’ insurance. This means it pays out before a crisis, based on pre-agreed scientific triggers, based for example on rainfall data. Unlike the current model, in which aid agencies receive funding only after a crisis has hit, it enables organisations to plan for and mitigate the worst effects of a drought.

A similar policy was signed for the 2019/2020 growing season and a 10.6m USD payout meant that more than 300,000 people were supported. In 2020 the payout 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 new policy announced today complements one purchased by the Government of Senegal, to ensure as many people as possible will be protected, in total more than 500,000 people.

Christina Bennett, CEO of Start Network said: “We are delighted to work with African Risk Capacity again to offer this protection for the people of Senegal at risk during the next drought. Slow aid funding is one of the biggest structural problems in disaster response efforts, yet the majority of crises can be predicted. And with the effects of the climate emergency on the world’s most vulnerable, the need for a new approach is more urgent than ever. We urge governments ahead of COP26 to fund anticipatory humanitarian action that can intervene before risks turn into disasters, to save more lives.”

“We have consistently proven that parametric insurance coverage is a valuable tool for protecting the lives and livelihoods of vulnerable communities in the event of natural perils. We are excited that our collaboration with partners like Start Network is helping Senegal and other countries to access an expanded risk coverage beyond that purchased by themselves. As we aim to provide coverage to the entire region, we call on our development partners to support this model and facilitate the participation of other countries for a well-coordinated and timely response in the event of climate risk events,” said Lesley Ndlovu, CEO, African Risk Capacity.

Karl von Klitzing, Director of the office of KfW – the German Development Bank -  in Dakar, Senegal said: "We are very happy that the Start Network has again bought a drought risk insurance from the African Risk Capacity (ARC) under the ARC Replica programme. We are proud that we were able to support the purchase from funds provided by the German Federal Ministry of development Cooperation, BMZ. In the past, the Start Network has proved to be a very efficient distributor of the payouts of the insurance to the most needy people affected. We very much hope that Senegal will be less effected by droughts in the future, however the realities of climate change unfortunately suggest otherwise."

Start Network will also purchase a similar policy for Zimbabwe later this year, in partnership with African Risk Capacity, the Government of Zimbabwe and the World Food Programme. The ARC Replica initiative in Senegal has been funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) through KfW with 7,2 Mio EUR of grants since 2018. In total KfW has provided more than USD 71 million to finance ARC from BMZ’s funds.

Read more about ARC Replica.

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ARC Replica Insurance

  • by Helen James

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