Strengthening the resilience of pastoralists against more frequent droughts
The challenge
Livestock is the main source of livelihood for many people in the Horn of Africa (HoA), one of the world’s poorest and most fragile regions. The HoA is home to about 50 million pastoralists, who are extremely poor. Climate change and resulting droughts, which are increasing in frequency and severity, pose an existential threat to them.
The governments in the HoA region, together with the World Bank, wanted to improve the resilience of small-scale pastoralists and their buyer market access while fostering the local insurance markets.
The solution
To address this challenge, Swiss Re and other insurers worked with Zep Re and the World Bank to implement the Horn of Africa De-risking, Inclusion and Value Enhancement (DRIVE) project, which is a public-private partnership providing affordable, yet commercially viable access to insurance for pastoralists in Ethiopia, Djibouti, Kenya and Somalia.
The programme was launched in August 2022 and features index-based livestock protection. Once the Normalized Difference Vegetation Index (NDVI), which is a widely-used metric for quantifying the health and density of vegetation using sensor data, reaches a certain threshold, insured pastoralists receive a payout. Advanced technology is leveraged for both insurance cover design and loss monitoring.