NGOs & HUMANITARIAN RESPONSE
When disasters strike, humanitarian organisations face intense pressure to mobilise resources quickly. However, traditional humanitarian funding mechanisms are often slow, with appeals and donor commitments taking weeks or months to materialise. This delay can leave affected communities without timely food, shelter, or medical support.
How ARC Ltd’s Parametric Risk Transfer Works
ARC Ltd enables humanitarian agencies to act faster through its Replica Insurance mechanism:
- Replica Insurance Model – Humanitarian partners purchase “replica” versions of a government’s sovereign policy. These mirror the parameters and triggers of the government’s cover, allowing aid agencies to access payouts when the same disaster conditions are met.
- Independent contingency plans – Each partner designs a plan to deploy resources, such as food assistance, shelter, or cash transfers, rapidly after a payout trigger.
- Enhanced coordination – The model aligns humanitarian action with government-led responses while enabling agencies to cover underserved or hard-to-reach areas.
Concrete Use Cases
MOZAMBIQUE – CYCLONE RESPONSE THROUGH WFP REPLICA, 2025
In early 2025, Cyclone CHIDO impacted Mozambique’s central region. While the sovereign cyclone insurance did not reach the payout threshold, WFP’s replica policy was triggered, unlocking funds to deliver targeted humanitarian assistance:
- Provided early food support to displaced families in hard-hit provinces
- Ensured faster relief than traditional humanitarian appeals
This demonstrates how replica insurance can fill gaps and respond to sub-sovereign needs, complementing government mechanisms.