Somalia drought triggers $2.2 million in payouts from African Risk Capacity

By Henry Gale

April 2 - (The Insurer) - A drought in Somalia has triggered insurance payouts from African Risk Capacity, which the regional risk pool said will support more than 45,500 households across the country.

ARC announced it had paid $1,455,710 to Somalia's government, while Start Network, a group of humanitarian organisations, received $727,855.

Both the government and Start Network have parametric drought insurance policies from ARC, which trigger payments automatically when certain conditions are met.

"Strengthening financial preparedness is key to protecting our people from recurring climate shocks," said Souleyman Omar, the director general of Somalia's ministry of finance.

The government will use its payout to provide emergency food assistance to more than 35,000 households, ARC said, while Start Network will deliver cash transfers to 10,500 households.

ARC has made similar payouts following droughts in Ivory Coast and Ghana in recent months.