ARC premium subsidy

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African countries are particularly affected by the increase in extreme weather events as a result of climate change. They generally do not have access to insurance solutions that can help manage extreme weather events and facilitate adaptation to climate change. Against this background, the African Risk Capacity (ARC) was founded in 2014 on the initiative of the African Union (AU). ARC offers African countries insurance against extreme weather risks. Compared to other risk pools, ARC is distinguished by the fact that it closely links financial disaster protection with an early warning system and binding emergency aid planning. German support for ARC includes trust funds to capitalize ARC Ltd., funds for technical support in institutional development and product development, premium subsidies, and for piloting the ARC Replica Program in cooperation with the World Food Program (WFP) and Start Network. The ARC premium subsidy program of EUR 18 million provides incentives for African countries and humanitarian actors to take out insurance with ARC. The premium subsidies are intended to establish ARC insurance premiums in the country budgets in the long term and to relieve humanitarian actors of financial burdens, with the aim of ensuring long-term cooperation between ARC and the countries taking out insurance and lowering the hurdles for purchasing insurance for the first time. The project contributes to the BMZ core theme of responsibility for our planet - climate and energy and the climate adaptation/climate risk management field of action of Agenda 2030. It is also embedded in the G7/G20 initiative InsuResilience Global Partnership initiated by Germany.