EDUCATION
Natural disasters such as cyclones, floods, droughts, and heatwaves cause school closures, displace learners, and damage infrastructure. These disruptions deepen educational inequalities, heighten dropout risks, and lead to long-lasting learning losses, yet education is rarely prioritised in disaster financing. Resources remain limited and response times slow, leaving systems vulnerable and students underserved.
How ARC Ltd’s Parametric Risk Transfer Works
Education can benefit from ARC Ltd’s parametric solutions by integrating it through the following pathways:
- Contingency planning within sovereign policies : Governments can earmark part of ARC payouts to restore schools, distribute learning materials, and maintain access to education after disasters.
- Inclusive insurance bundles support household stability, indirectly helping families keep their children in school during crises.
- Emerging parametric triggers for education : Future products could include triggers based on school closures, enrolment drops, or infrastructure damage to release rapid support for education continuity.
Concrete Use Cases
CLIMATE RESILIENT EDUCATION SYSTEMS TRIAL (CREST) – IRC & ARC LTD COLLABORATION
ARC Ltd is collaborating with the International Rescue Committee’s CREST initiative, a £3 million, 30-month pilot launched in mid-2024 with UK FCDO support. CREST is the first parametric insurance trial designed to protect education systems from climate-induced disruptions.
The project combines community-led early action with parametric finance to:
- Ensure funding scales rapidly when climate-related school closures occur
- Facilitate continuity of learning, safe re-entry into school, and guard against adverse coping strategies by households
- Pilot mechanisms that can be scaled across contexts with frequent climate shocks
CREST is being implemented, aiming to generate evidence to scale parametric education finance in climate-vulnerable countries.