HOW DROUGHT INSURANCE IS BRINGING SELF-SUFFICIENCY TO DEVELOPING NATIONS

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Drought is a certified killer in developing nations, bringing hunger and disease to crops, cattle and people. Six years ago, a drought-induced famine killed 260,000 Somalis. The UN recently launched a $854m appeal to help 5 million Somalis who are experiencing another such drought.

But there is hope on the horizon. Senegal experienced a significant drought in 2014, but it was hardly reported in the international news – this is because Senegal, along with Mauritania, Niger, and Kenya, had created and joined African Risk Capacity (ARC).

They pooled resources into this mutual insurance company, meaning Senegalese people did not starve to death the way they had in Somalia.

Catastrophe risk pools such as the ARC have emerged over the last 10 years to protect vulnerable populations and national budgets from extreme weather events. To date, 26 countries in Africa, the Caribbean and Central America have created risk pools.

When Hurricane Matthew hit in 2016, the Caribbean version paid out $30m to affected countries. In 2015, the ARC paid out over $26m after lack of rains in the Sahel, south of the Sahara Desert.

Of course, the funds from risk pools do not replace international assistance – but they do provide early cash assistance for families, reducing the overall need from aid. The government in Senegal responded rapidly to the 2014 drought, focusing their aid on the most vulnerable populations including children under five and lactating mothers. Witnessing its effectiveness, Malawi, Gambia, Mali, and Burkina Faso have since joined the ARC.

According to research from Oxford University, each dollar invested in ARC before the catastrophe saves $4.40 in the aftermath of an event.

If you would like to speak to a broker today, please call us on 01737 377250 or visit us on  http://www.insureeasy.co.uk 

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HOW DROUGHT INSURANCE IS BRINGING SELF-SUFFICIENCY TO DEVELOPING NATIONS