Climate-related disasters are increasing in both frequency and severity, threatening food security, livelihoods and development gains across vulnerable regions worldwide. As climate and weather shocks become more predictable through advances in monitoring and forecasting, there have been growing international calls to shift humanitarian action from reactive crisis response towards proactive, risk-based approaches. Anticipatory financing is increasingly recognised as a cost-effective solution, enabling earlier intervention that helps reduce harmful coping mechanisms, supports faster recovery and strengthens long-term resilience. However, despite this growing recognition, humanitarian funding and response mechanisms remain largely reactive, with support often only mobilised after communities have already suffered significant loss and damage.
Recent climate shocks have demonstrated the devastating social and economic impacts of these events. In Malawi, the 2015/16 drought triggered a food crisis affecting 6.7 million people, nearly one third of the country’s population. In Pakistan, the 2022 floods pushed an estimated 8.4 to 9.1 million additional people below the poverty line, while women and children accounted for 85% of those displaced following the 2010 floods. In Ethiopia, droughts have affected an estimated 100 million people over the past four decades, while in Mozambique more than 3 million people are expected to be affected by drought annually by 2050. Nepal has experienced 47 major floods between 1980 and 2020, affecting approximately 5.7 million people, and in Zimbabwe more than half of the rural population is projected to face food insecurity due to the impacts of El Niño.
To address these growing challenges, the InsuResilience Solutions Fund (ISF) has partnered with Tearfund as project lead, alongside Global Parametrics and Humanity Insured, to scale up an innovative index-based disaster risk financing initiative designed to enable anticipatory humanitarian action across six countries. The initiative builds on a pilot launched in 2024 covering selected districts in Ethiopia, Malawi, Nepal and Pakistan, with plans to expand drought coverage to Mozambique and Zimbabwe and introduce excess rainfall protection in the initial four countries.
The project aims to scale up meso-level parametric insurance solutions covering drought risks in six countries and excess rainfall risks in four countries, helping protect the food security and livelihoods of 30,000 highly vulnerable households. By enabling earlier humanitarian response before crises fully unfold, the initiative seeks to strengthen community resilience and reduce the long-term impacts of climate-related disasters.
Tearfund’s approach uses pre-arranged financing mechanisms in which satellite-data-based indices trigger the release of funding once predefined climate thresholds are reached. These meso-level parametric insurance products provide rapid liquidity to Tearfund as policyholder, enabling local teams and partners to implement anticipatory interventions before vulnerable households experience the full effects of drought or excessive rainfall.
The value of this approach has already been demonstrated through the existing pilot programme. In January 2025, a drought trigger in Malawi resulted in a payout of USD 100,000, supporting early humanitarian action in affected communities. Decisions regarding the allocation of funds are made collaboratively by local country teams, implementing partners and relevant district-level government authorities to ensure support is targeted effectively and aligned with local priorities.
By expanding access to climate risk financing and strengthening anticipatory humanitarian response mechanisms, the initiative represents an important step towards reducing vulnerability, protecting livelihoods and building resilience for communities increasingly exposed to climate-related shocks.
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