Tearfund, Global Parametrics, and Humanity Insured launch drought insurance payout in Malawi

Tearfund, a global Christian charity focused on ending poverty and injustice, has partnered with Global Parametrics, a provider of parametric risk transfer solutions, and Humanity Insured, a UK charity offering insurance to vulnerable communities, to announce the first-ever drought insurance payout for smallholder farmers in Malawi.

The £80,000 payout is made possible by a groundbreaking parametric insurance product that uses satellite data to monitor soil moisture levels and determine the availability of water for crops.

This partnership seeks to offer financial relief to farmers at risk of crop failure due to extreme weather events, particularly droughts, helping to safeguard communities from hunger and providing essential support for long-term food security.

The insurance product is triggered when soil moisture levels fall below a pre-agreed threshold within a specific timeframe, eliminating the need for loss estimations and enabling fast, transparent payouts. This approach helps farmers take proactive measures to protect their crops and communities in times of crisis.

Elizabeth Myendo, Tearfund’s Regional Lead for Southern and Eastern Africa, said: “We are preventing a hunger crisis before it takes hold. This insurance payout will preemptively support 1,200 households with drought tolerant crops (such as sweet potato vines and cowpeas) and high value horticultural crops (such as aubergines, onions and tomatoes). It is a key tool in tackling malnutrition.”

This breakthrough solution represents an exciting new source of financing to protect vulnerable communities from the impact of climate change and extreme weather events. Developed by Global Parametrics and funded by a premium subsidy from Humanity Insured, the risk transfer product promises to reduce the impact and cost of humanitarian crises.

“If the rains had not come at all, the insurance package could have also been positioned to provide emergency food supplies to help families through a period of extreme hunger,” explains Myendo.

“Teaming up with Global Parametrics and Humanity Insured enables us to ensure that the long term work we are doing in partnership with local churches and communities around the world, helping people adapt to the effects of climate change, is better protected. The flexibility and varying levels of support the product offers means the people we work with will be more resilient to setbacks caused by extreme and unpredictable weather events.

“Tearfund, Global Parametrics and Humanity Insured, have together built this solution that will also be used in Nepal, Pakistan and Ethiopia as well as Malawi, focusing on protecting low income families vulnerable to severe drought. We hope to go on to protect communities against excess rainfall, tropical storms, heatwaves and other types of disaster too.”

Tearfund’s Country Director for Pakistan, Jonathan Johnson, said: “It’s clear that the gap between the cost of global disasters and the finance available to respond to their impact is growing. People cannot depend on traditional models of aid, which can be slow to flow through to those at the sharp end when extreme weather events take hold. People at risk of extreme drought and famine must have fair access to insurance.”

This initiative is made possible through the support of the Natural Disaster Fund (NDF), which provides risk capacity. Managed by Global Parametrics and funded by the UK’s Foreign, Commonwealth, and Development Office, as well as Germany’s development bank KfW, the NDF’s support helps build financial resilience in disaster-prone communities.

Mark Rüegg, CEO of CelsiusPro Group, commented: “We are delighted with our partnership with Tearfund and Humanity Insured on this drought solution to support the resilience of smallholder farmers. This collaboration between the humanitarian, development and insurance sectors accelerates climate resilience and food security.”

Charlie Langdale, CEO of Humanity Insured, noted: “This exciting new partnership with Tearfund is delivering critical services that help shield vulnerable communities from disasters. This innovative insurance solution not only protects families from the immediate impacts of drought but strengthens their long-term resilience, by restoring certainty and financing recovery.

“Using satellite triggered insurance, money reaches those in need quickly, preventing disasters from becoming crises, and allowing people to manage climate shocks. With this safety net in place, we create a virtuous cycle of prosperity, allowing families to focus on their future—investing in everything from education to climate-resilient farming practices.”

Tearfund’s ongoing collaboration with the insurance industry and the development of new technologies aim to support the world’s most climate-vulnerable communities. This includes work in Ethiopia, where Tearfund is developing digital tools to aid farmers in remote locations, offering early warnings of extreme weather events and practical advice to protect livelihoods.

“Our aim is to disseminate early warnings of extreme weather events and offer practical advice, sent via voice notes in local languages, on how to protect livelihoods. We are also trialling a specially designed mobile app that will link small-scale farmers to parametric insurance packages to protect themselves and their communities against major losses in the event of extended droughts. Ultimately, there cannot be climate justice without fair, affordable and accessible insurance for the most vulnerable,” added Myendo.

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