We structured a parametric product to support Tearfund’s multi-country drought response efforts
Case studies
Context
Tearfund is a humanitarian and development organization operating in over 50 low-income countries, with the mission of tackling extreme poverty.
Climate-vulnerable communities are facing more frequent and severe droughts, threatening food security and livelihoods. Tearfund recognizes the need for more pre-arranged financing mechanisms that can enable faster, targeted assistance.
The objective is to develop a drought parametric cover linked to anticipatory action plans to support communities in Ethiopia, Malawi, Nepal, and Pakistan.
Action
Supported by NDF TA funding, Global Parametrics (GP) partnered with Tearfund to structure a parametric product to support Tearfund’s multi-country drought response efforts. GP’s activities include:
Structuring a parametric insurance product with its Water Balance Index, tailored to drought risks in Ethiopia, Malawi, Nepal, and Pakistan
Engaging in extensive capacity-building activities with Tearfund’s international office and country teams on parametric insurance and drought index
Providing reinsurance capacity via the Natural Disaster Fund
Developing a bespoke platform for index monitoring
Tearfund is working with country teams to develop drought preparedness and anticipatory action plans. It is also conducting regular in-country learning and monitoring to identify areas for improvement and evaluate scaling potential. Humanity Insured provided premium subsidy for this programme.
Impact
- $350k
- payout to Pakistan triggered in year one
- $100k
- payout to Malawi triggered in year one
- 1,200
- HHs benefited from anticipatory actions funded by these payouts
- 3,000
- HHs supported with food relief, clean water, etc. using these payouts
