By Andreas Bollmann, Partner, Faber Consulting AG, Switzerland

Nagaland, a state known for its cultural heritage and ecological diversity, faces growing risks from climate change. Increasingly erratic rainfall, floods, landslides, and droughts threaten hard-won development gains. These hazards are magnified by fragile ecosystems, unplanned urbanisation, and limited coping capacities. Strengthening disaster resilience, therefore, requires global expertise combined with strong local partnerships.

Insurance has long helped societies absorb shocks by transferring financial risk, enabling recovery and growth. Today, climate and disaster risk financing can complement disaster risk reduction (DRR) and climate change adaptation (CCA). But insurance alone is not enough – it must be integrated into a broader resilience strategy.

In Nagaland, the Nagaland State Disaster Management Authority (NSDMA) has taken a leading role in developing integrated solutions. Recognising that State and National Disaster Response Funds are often under-resourced, the NSDMA partnered with Faber Consulting, Indian insurers, and global reinsurers in 2020 to pilot India’s first sub-sovereign parametric disaster risk insurance product. Initially based on satellite data, the product has since been refined to rely more on local weather station data, ensuring more accurate coverage. Furthermore, the new product has enabled Nagaland to secure robust and reliable insurance support on a multi-year basis, leading to improved budget certainty. Supported by the InsuResilience Solutions Fund (ISF), the initiative also benefits from grant funding and implementation support.

A pioneering feature is the use of blockchain technology to power a Decentralised Relief Pay-out System (DRPS) linked to Nagaland’s Disaster Management Information System (NSDMIS). This ensures faster, more transparent compensation for affected populations – critical during monsoon rains, flash floods, and landslides that frequently disrupt lives, livelihoods, and infrastructure.

The project aims to strengthen Nagaland’s disaster response by providing reliable financial resources and accelerating relief pay-outs. The next step is for the NSDMA to embed such insurance mechanisms within a comprehensive risk management framework. This will enable decision-makers to allocate resources between proactive investments, such as resilient infrastructure, improved land-use planning and ecosystem protection, and financial tools, such as insurance, for managing residual risk.

This envisaged integrated approach recognises that resilience cannot be achieved through a single tool. Insurance provides a safety net, but it also works best when paired with investments in risk reduction and adaptation. By combining financial protection with measures that reduce vulnerability, Nagaland can better safeguard development gains and protect its most at-risk communities.

The Nagaland experience offers a valuable lesson with global relevance: partnerships that connect international expertise with local realities can drive meaningful resilience. Through its collaboration with experienced partners, NSDMA is building a forward-looking disaster risk management system. This model demonstrates how innovation, finance, and strong local leadership can create pathways toward safer, more resilient communities in the face of climate change.

Disclaimer: The views expressed in this piece are those of the author/s and do not necessarily reflect the views or policies of AIDMI.