The African Risk Capacity has launched its own parametric insurance product against high-impact epidemic risks.
In a statement, the organisation said that Senegal was to be the first African country to join this new innovative financing mechanism.
African Ministers of Finance in 2015 requested ARC to develop a product to meet countries’ rapid funding needs to contain high-impact infectious disease outbreaks and complement the efforts of the Africa Centres for Disease Control and Prevention (Africa CDC).
In 2022, the ARC Group and its partners finalized the development of the said product, which will provide parametric insurance to African Union (AU) member states for three selected pathogens responsible for Ebola virus disease, Marburg virus disease, and meningitis.
At a workshop held on September 28, 2022, in Dakar, the ARC’s parametric insurance product against disease outbreaks of epidemic potential was presented to the ARC’s Technical Working Group, which made a favourable recommendation for Senegal’s participation in ARC’s sovereign parametric insurance product covering the costs of interventions in the event of epidemics of Ebola virus disease, Marburg virus disease, and meningitis.
Thus, Senegal will become the first African country to benefit from this innovative financing instrument against disease outbreaks and thus paves the way for other member states of the African Union (AU).
“In our perspective of diversifying our product offering aimed at protecting the most vulnerable populations of our continent, we are today launching this new sovereign risk transfer mechanism through parametric insurance, which will allow our Member States to benefit, in addition to insurance against climate-related disasters, from coverage against epidemic risks,” said UN Under-Secretary-General and ARC Group Director General Ibrahima Cheikh Diong.
“We are confident that these predictable funding tools coupled with operational plans will strengthen response capacities of our Member States while developing their expertise to tackle public health emergencies”.
Ginkgo Bioworks provided epidemiological expertise and epidemic risk estimation services; subscription to the insurance product was made through ARC Ltd, a financial subsidiary of ARC; Munich Re has been chosen as the lead reinsurer for the insurance product due to its long-standing expertise in epidemic risks and parametric insurance solutions; the reinsurance broking service was performed by AON, and the insurance premium was subsidized by the Swiss Agency for Development and Cooperation (SDC).