What is the challenge

In Somaliland, pastoralism is the backbone of society. Approximately 55 percent of the population practices nomadic herding, while nearly 70 percent depend on livestock for their livelihoods. Yet this way of life faces an existential threat from climate change. Increasingly frequent and severe droughts have transformed a system once defined by seasonal rhythms into one perpetual crisis. Acute water shortages and rapid pasture degradation now drive widespread livestock losses, undermining food security and household incomes at scale.

The human and economic toll is stark. The 2022 drought alone killed an estimated three million head of livestock and pushed nearly half of Somaliland’s population into food insecurity. As traditional livelihoods collapse, pastoralists are forced into internal displacement camps, where competition over scarce natural resources often fuels inter-clan tensions.

Despite these realities, the humanitarian response remains largely reactive. Funding is typically mobilized only after disasters strike, rather than invested in anticipatory and resilience-building measures. Conventional insurance models also fail nomadic communities, as they rely on fixed locations that do not align with pastoral mobility. Combined with weak early warning systems and low financial literacy, these gaps create a persistent “protection gap,” leaving the most vulnerable populations exposed to escalating climate shocks.

What is innovative about the project

The project moves beyond traditional, reactive humanitarian assistance by introducing a robust anticipatory financing model tailored to pastoral systems. While Index-Based Livestock Insurance (IBLI) has previously been piloted in the region, this approach directly addresses the systemic barriers of accuracy, affordability, and accessibility that have historically limited its scale and impact.

Conventional insurance schemes often rely on a single indicator, such as the Normalized Difference Vegetation Index (NDVI), which can be unreliable in arid landscapes or areas with dense tree cover. This project pioneers a multi-index technology stack, combining complementary data sources to ensure payouts are triggered with far greater precision and relevance to on-the-ground conditions.

Innovation extends beyond technology to the design of market systems. Rather than offering insurance as a standalone and often abstract product, the model bundles coverage with high-value, immediate tangible services, including direct veterinary inputs and access to tailored microfinance products. This integrated approach increases trust, uptake, and real-world utility for pastoral households.

What are the expected outcomes

The project’s immediate objective is to provide 1,500 pastoralist households with a reliable financial safety net. By introducing insurance that is both more accurate and affordable, the initiative aims to fundamentally change how communities prepare for and respond to drought. Rather than waiting for emergency assistance after losses have already occurred, households will have timely access to funds and essential inputs to protect their herds before conditions deteriorate. This shift helps keep livestock alive, stabilizes food security, and reduces the need for families to abandon their homes in search of relief.

Achieving this requires the development of a comprehensive support ecosystem. The project will work to create an enabling environment for insurance providers, train local agents to serve remote pastoral areas, and deploy advanced satellite-based technologies to ensure payouts are both rapid and transparent. By bundling insurance with financial services and veterinary care, the model embeds risk management tools into the everyday functioning of the pastoral economy, moving communities away from recurring cycles of loss toward proactive protection.

Looking ahead to 2030, the project seeks to catalyze a sustainable and fully functioning livestock insurance market in Somaliland. The long-term vision is to strengthen pastoralists’ resilience to climate shocks by expanding access to credit, enabling households to take greater control over their economic futures. By stabilizing livelihoods and supporting more effective resource management, the project aims to contribute towards reduction in climate related displacement, contributing to a more peaceful and resilient region

Who are the project partners

The project is managed by ADRA Norway and implemented by its partners in Somalia. IBLI is implemented under the umbrella of the Somalia Resilience Program (SomReP), a long-standing consortium with more than 13 years of experience operating in the region. This partnership combines deep technical expertise, strong local implementation capacity, and innovative financial approaches to ensure effective delivery and sustainability.

ADRA and World Vision in Somalia are core members of the SomReP consortium, providing the operational footprint and technical oversight required to reach remote pastoral communities. Within this framework, the Somali Response Innovation Lab (SomRIL), housed within World Vision, draws on more than eight years of experience to identify and scale context-appropriate innovations and to convene the technical partners responsible for delivering the integrated solution.

The International Livestock Research Institute (ILRI) serves as the project’s scientific anchor. As pioneers of index-based livestock insurance, ILRI contributes to rigorous, data-driven research to ensure the model is grounded in proven, science-based methodologies.

Nuru Solutions complements this expertise as the project’s technology partner, focusing on precision and cost efficiency. By integrating multiple satellite-derived indices, Nuru enhances the accuracy of payout triggers while reducing overall insurance costs.

Wadaag Bank provides the critical link to the local economy. They lead on-the-ground delivery of insurance services, conducting community awareness campaigns and training local “IBLI Champions” to support enrollment and ongoing engagement of the 2,000 targeted households.