ARC Replica payout, Senegal 2020 - Internal Evaluation

This report demonstrates how insurance can help governments and organisations to predict and proactively manage climate-related humanitarian risks at scale. The report, published by Start Network, a global collaboration of humanitarian NGOs, is based on a comprehensive evaluation of its programme in Senegal, which utilised a ‘parametric insurance’ policy to pay out before the worst effects of a drought were felt.

The report shows the value of proactively managing humanitarian risks. Impacts included:

• 86% of households reported that they received the cash early enough to help prepare for the lean season.
• 85% of households reported improving the quality or quantity of food they were accessing
• The number of households with children having to work reduced by 13%

The report also makes a recommendation for other risk financing programmes to embed ‘single hazard’ insurance policies within wider risk management strategies to enable flexibility when there are the compounding effects of multiple hazards, as was the case here with drought and COVID-19. This can be achieved by complementing insurance-based approaches with other forms of flexible contingency financing. Start Network is developing an infrastructure for this at the global scale through its Start Financing Facility.