IDDRR
Financing resilience through insurance
Humanity Insured and Tearfund’s drought insurance programme shows how proactive finance and early action can protect smallholder farmers from repeated losses, safeguard livelihoods, and strengthen resilience in drought-prone regions.
ORGANISATION
Humanity Insured, Tearfund
LOCATION
Nepal, Malawi, Pakistan, Ethiopia
The challenge: repeated drought and rising vulnerability
Smallholder farmers in drought-prone regions face recurring crop failures, livestock losses, and declining incomes. These shocks often force families to sell essential assets, deepening poverty and reducing their capacity to cope with future disasters. Without timely support, repeated losses can entrench vulnerability and perpetuate cycles of food insecurity.
The project: innovative drought insurance for resilience
Humanity Insured, a new charity focused on making advanced insurance accessible to vulnerable populations, partnered with Tearfund to introduce drought insurance for smallholder farmers in Nepal, Malawi, Pakistan, and Ethiopia.
The approach combines:
- Forecasting and early action: Monitoring drought risk to anticipate impacts before they escalate
- Timely pay-outs: Rapid financial support delivered when thresholds are triggered, allowing farmers to invest in recovery measures
By providing support before the worst effects of drought strike, the project helps communities maintain livelihoods, protect assets, and recover quickly.
Impact on communities
The insurance programme has delivered tangible benefits:
- In February 2025, a pay-out of £80,000 in Malawi supported 1,200 households to access drought-tolerant crops such as sweet potato vines and cowpeas, as well as high-value horticultural crops including tomatoes, aubergines, and onions
- In May 2025, Pakistan experienced the highest drought threshold, triggering a pay-out of £261,243, reaching 3,000 families. Assistance included food, clean water, hygiene kits, suitable seeds, and veterinary support to protect livestock, all delivered before the worst impacts of the drought
These early interventions have prevented loss of livelihoods, reduced food insecurity, and strengthened communities’ ability to withstand climate shocks.
Why it matters for disaster risk reduction finance
By channelling funding into proactive drought insurance, Humanity Insured and Tearfund demonstrate that investing in resilience pays off. Communities receive rapid support before disaster losses escalate, reducing long-term vulnerability and safeguarding food, water, and livelihoods.
This approach shows that disaster risk finance is not just a response tool but a preventive investment – empowering local communities to manage risks and recover faster when climate shocks occur.
This International Day for Disaster Risk Reduction, GNDR calls for governments, donors, the private sector and financial institutions to prioritise funding for resilience, not just funding for disasters when they strike.
All photos: Humanity Insured, Tearfund