Innovative financial models like ARC have proven that pooling risk and resources, contingency planning, and early intervention provide the tools and resources for African nations to take control of their disaster relief efforts. This framework can also be applied to other crises, including disease outbreaks and epidemics. After the devastating Ebola epidemic in 2014 in the West African countries Sierra Leone, Guinea and Liberia, the member states asked ARC to establish outbreak and epidemic insurance to support immediate, country-led action to manage infectious disease outbreaks before they become global threats. This new ARC facility is expected to become operational by 2018 with the first participating states.
ARC’s mission is to use modern finance mechanisms such as risk pooling and risk transfer to create pan-African response systems that enable African countries to meet the needs of people harmed by natural disasters. With insurance pay-outs, early warning systems, and contingency plans for emergencies in place, national governments have the tools and resources to initiate and take control of relief efforts long before international aid arrives. In that sense, ARC empowers governments to transform their emergency response systems; increase capacity to face the challenge of weather events and other disasters, including pandemics; and to ultimately save lives and support the livelihoods of those most affected. It is truly an African-led solution to address African problems.
ARC has made a strong start, yet its value and impact will grow exponentially as more countries purchase policies and integrate its core principles into disaster planning and financing, as the international community lends its support to scale up coverage in poorer and more fragile states. This unique financial mechanism demonstrates the power of insurance to manage loss and damage from natural disasters and shift the focus to fast, efficient and locally-led responses. At a time of growing concern about future limitations on international resources and humanitarian aid, ARC will help African nations be better prepared, stronger financially, and more resilient in the face of natural disasters, wherever and whenever they may arise.