Index-based insurance products represent a promising and exciting innovation for managing the climate related risks that vulnerable households face. The creation of insurance markets for events whose likelihood of occurrence can be precisely calculated and associated to a well defined index is increasingly being championed as a way to make the benefits of insurance available to the poor. Over the past year, the International Livestock Research Institute (ILRI), in collaboration with its partners at Cornell University, the BASIS Research Program at the University of Wisconsin-Madison, and Syracuse University, has pursued a substantial research program aimed at designing, developing and implementing market-mediated index-based insurance products to protect livestock keepers – particularly in the drought prone ASALs – from drought-related asset losses.