Papa Zoumana Diarra: “The ARC was born from the drive of the African Heads of State”



The head of operations and planning of the Emergency Insurance Company ARC Limited (ARC Ltd), Papa Zoumane Diarra discusses the role of this new structure of the African Union, in charge of insurance against disasters. The very first disbursements were made during the month of January. Could you speak about the origins of the ARC?

ARC was born from the drive of the African Heads of State to provide the continent a mechanism to manage catastrophic risk by making State funds available as a rapid relief funds. Thus in accordance, with the decision of the Conference of the Heads of State and the Government of the African Union on July 16, 2012, the ARC was created as a specialized institution of the African Union. In November 2012, plenipotentiaries of 41 African countries met in Pretoria, South Africa to negotiate and adopt the agreement supporting the creation of the ARC.

On what basis were the first disbursements made?

The software Africa RiskView detected, just in time, rainfall deficits and triggered a disbursement to affected countries. As a result, the insurance company paid $25 million to three Sahel countries, namely Senegal ($16.4 million), Mauritania ($6.3 million), and Niger ($3.3 million), who had collectively paid a premium of $8 million. These funds enable countries to quickly assist communities through support plans, which are previously prepared and approved.

What are the specific advantages to the subscribing countries?

Africa Risk Capacity (ARC) is a specialized institution of the African Union that aims to improve current response mechanisms, to protect vulnerable populations from food insecurity, and to reinforce the risk management capacity of participating countries. Based on the principal of African solidarity for effective financial management of extreme weather risk, the ARC intends to allow African governments to achieve substantial savings on emergency response funds by reducing the cost of interventions by pooling extreme weather risk across the African continent. Thus, in case of drought, countries participating in the ARC will benefit from drought insurance coverage, thus they can quickly come to the aid of affected populations. This permits countries to bring aid to the people before they lose their means of production.

What relationships exist between the ARC and other insurance companies and reassurance companies on the continent?

The ARC intervenes on the macro living by shifting the burden of extreme weather events from government – and farmers and breeders – to the ARC. The ARC is reinsured by a group of reinsurance companies including Africa Re and many other international groups.

Interview by: Adama Wade


There are two structures for insurance against risk related to catastrophes:

– African Risk Capacity (ARC) is an agency of the African Union put in place to help member countries of the African Union reinforce their capacities to better plan, prepare and respond to extreme weather events and natural catastrophes

– African Risk Capacity Insurance Company, ARC Ltd, was established at the end of 2013 as a financial subsidiary of the ARC institution. It is registered in Bermuda as a hybrid mutual insurance company. ARC Ltd offers parametric insurance products to which the Member States of the ARC may subscribe and pool risk across the continent for a sustainable solution to financing risk at the lowest possible price.