Pakistan has significantly reduced poverty, with rates falling from 35% in 2002 to 13.6% in 2011. However, the country remains highly vulnerable to disasters like floods and droughts, which threaten these gains. For example, droughts between 1998–2002 killed 15 million cattle, causing $2.5 billion in losses, while the 2010 floods caused over $4 billion in damage. Most households lack savings, leaving them exposed to severe hardship.

To address this, the Munich Climate Insurance Initiative and Pakistan’s National Disaster Management Authority launched the country’s first national disaster management fund. It offers climate risk insurance for low-income individuals, helping them recover and adapt to worsening climate impacts.