The Government of the Federal Republic of Germany shared on the margins of the ongoing United Nations 2021 United Nations Climate Change Conference. The sum of €18million was allocated to subsidize the cost of disaster risk insurance for qualifying African Risk Capacity (ARC). Furthermore, the Parliamentary State Secretary to the Federal Ministry for Economic Cooperation and Development, Dr Maria Flachsbarth, spoke too. She said that the commitment will help establish a Premium Support Facility for African governments and humanitarian agencies. In addition, those that wish to purchase climate related insurance.
ARC, an African Union initiative led by 35 AU Member States, works especially around insurance for droughts and tropical cyclones. The standard approach to pay for climate disasters is slow and unpredictable. Moreover, they are usually done through 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 ARC replaces these outdated approaches by offering governments and humanitarian actors the opportunity to plan and purchase insurance. This option usually offers fast pay-outs, quickly reaching people who need support. This prevents humanitarian needs from escalating, ultimately saving lives, protecting livelihoods and assets, and safeguarding development gains.
Additionally, due to climate change threatening to bring more severe extreme weather events, the Premium Support Facility will be crucial for the most vulnerable African countries. =