When the October-December rains failed across the Horn of Africa, 71,290 pastoralist families didn’t have to wait. By the time governments gathered to announce what had happened, they had already been paid.
A payout of US$9 million in three countries within one week. This was its largest-ever payout cycle. Here is how it happened: Satellites follow pasture availability throughout the season. When the 2025 short rains failed, they confirmed what herders were experiencing— that the pasture was gone.
The pasture index crossed the drought threshold. The system did the rest. It released payouts, reaching households across Ethiopia, Somalia, and Kenya before a single announcement had been made. No one filed a claim and no assessor was dispatched.
This was insurance purchased by pastoralists, triggered by satellite data, and paid. Behind this seamless purchase of insurance and claims settlement is the De-Risking, Inclusion and Value Enhancement of Pastoral Economies (DRIVE) initiative, which is financed by the World Bank and implemented by ZEP-RE alongside the governments of Ethiopia, Somalia, and Kenya.
In Ethiopia, the payout made on February 24 was ETB 463 million (approximately US$3 million), which went to 26,929 households. This was the country’s largest-ever payout under index-based livestock insurance.
Dr Fikru Regassa, State Minister for Agriculture in the Federal Republic of Ethiopia, called it a promise kept. Ethiopia had subsidised premiums, backed the product, trusted the mechanism and the mechanism had just delivered the country’s largest-ever index-based livestock insurance payout.
“In Ethiopia, livestock is more than how a family earns, it is who they are. Protecting that is the duty of a government that takes its people seriously,” said Regassa.
Bisrat Teshome Mekonnen, senior private sector development specialist at the World Bank, said “Climate finance works when it is built around the people it is meant to serve. That is the standard the world should be setting.”
In Somalia, US$3.88 million was paid out to 17,734 pastoralists on March 2, 2026, becoming the single largest payout in DRIVE’s history. The payout was announced at an iftar gathering during Ramadan, marking the biggest-ever disbursement under a Sharia-compliant Takaful drought index product.
Payments reached pastoralists through digital accounts, many opened for the first time, with the majority of the accounts held by women. In a country where formal insurance barely existed a few years ago, thousands of pastoral households now hold digital financial accounts connected to a system that responds automatically when climate shocks strike.
“This payout shows that the Takaful product works. When drought hits, support reaches pastoral families immediately,” said Suleiman Sheikh Umar, director general in the Ministry of Finance, Federal Government of Somalia.
In Kenya, the payout was disbursed to over 20,000 households, demonstrating the innovativeness of the DRIVE initiative. Behind every payout sits capital. In this case, it is the reinsurance capacity of ZEP-RE.
Under DRIVE, ZEP-RE has taken African capital underwriting risk across the Horn of Africa at a scale that did not exist about three years ago. Governments in all three countries entrusted their pastoralist protection programmes to an architecture that an African reinsurer helped design, capitalise, and operate.
“This is a fund that came from a Takaful system where contributions are paid, risk transferred, data triggered and payout delivered. That pipeline exists because African reinsurance capacity made it possible,” said Hope Murera, group managing director and CEO at ZEP-RE.
Sonia Plaza, senior economist at the World Bank said “If this financial product can work here, it can work anywhere.”
The payouts mean that the 71,290 families did not have to sell their animals because of drought. That is what climate risk infrastructure looks like when it works.
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