Germany to subside disaster risk in ARC member states

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The German government has announced funds of EUR18m ($20.4m) to subsidise the cost of disaster risk insurance for qualifying African Risk Capacity (ARC) member states.

Dr Maria Flachsbarth, the parliamentary state secretary to the Federal Ministry for Economic Cooperation and Development (BMZ), said this on the margins of the United Nations 2021 United Nations Climate Change Conference (COP26) earlier this month.


TatessFollowing the COVID-19 pandemic, many African governments have severely constrained budgets and humanitarian agencies are struggling to meet unprecedented levels of need. This new funding will subsidise insurance premiums, decreasing in future years as countries and organisations are able to take over the costs using their national budgets and long-term sustainable financing.


ARC, an African Union (AU) initiative led by 35 AU member states, provides insurance for droughts and tropical cyclones. The standard approach to pay for climate disasters is slow and unpredictable, using humanitarian appeals or loans arranged after a disaster strikes. ARC replaces these outdated approaches by offering governments and humanitarian actors the opportunity to plan and purchase insurance that can provide fast payouts, quickly reaching people who need support.

Since 2014, 62 policies have been signed by member states for cumulative insurance coverage of $720m for the protection of 72m vulnerable people in participating countries.

ARC Group consists of ARC Agency and ARC Insurance Company (ARC Ltd). ARC Agency was established in 2012 as a specialised AU agency to help the member states improve their capacities to better plan, prepare and respond to weather-related disasters. ARC Ltd is a mutual insurance facility providing risk transfer services to member states through risk pooling and access to reinsurance markets.

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