Countries in that continent are now looking to broaden a catastrophe protection fund for emergencies like Ebola.
African countries are in insurance news headlines as they now seek to widen a new type of catastrophe fund, which has already made its first payout, as of January, which was for $25 million.
The catastrophe insurance fund is meant to provide protection against Ebola-like outbreaks.
This insurance news could mean that countries that face catastrophes such as the devastation left behind by the Ebola outbreak in several African countries, could receive payouts that will help them to recover. A program was launched by the African Risk Capacity (ARC) agency, last year. That special branch of the African Union created the fund in order to help to provide insurance against natural disasters.
The goal was to help to make sure that countries in Africa would not need to rely as heavily on foreign aid, by preparing themselves through the use of innovative new financial techniques in order to stand up against the upcoming impact that can be expected as a result of climate change.
The first payout is making insurance news as Senegal, Niger, and Mauritania received $25 million from ARC.
These insurance payouts were made to the countries in order to help them to recover from the impact of the severe drought that was experienced in the Sahel region which is located to the south of the Sahara Desert. This payout was considerably higher than the $8 million that was paid by those countries in their premiums, meaning that because of this program, they will be better off, financially, than they would have been on their own.
The other African country that had paid premiums into protection through the program was Kenya. It made a total of $9 million in payments, but did not receive any claims payouts.
The director general of ARC, Richard Wilcox, explained to insurance news media that the success of this program has encouraged 12 countries to enroll for the second year of its existence. He explained that ARC has also been approached to form a protection fund against epidemics that could strike in the way that West Africa was hit by the Ebola outbreak that has killed over 8,800 people in Liberia, Guinea, and Sierra Leone, while causing severe harm to their economies.