In India, heat-triggered insurance offers 'some relief'
A parametric heat insurance scheme in Ahmedabad, India, now pays out to workers like Lata Solanki when temperatures exceed 43.72°C for two consecutive days, offering modest financial relief. The program, covering over 30,000 women in 2025, aims to mitigate economic losses from extreme heat, which cost India an estimated $194 billion in labor in 2024, according to Lancet Countdown research.
In Ahmedabad, India, a parametric insurance scheme provides financial support to workers when extreme heat triggers predefined temperature thresholds. Lata Solanki, a 42-year-old clothes seller, previously faced a choice between working in dangerous heat or losing income. Now, the scheme pays out automatically after two days of temperatures exceeding 43.72°C, offering her 750 rupees ($9) in 2024—a relief given her rural household’s average monthly income is 10,000 rupees ($105). The program, launched in 2024 by the non-profit Mahila Housing Trust (MHT) and global insurer Go Digit, covers 26,000 women in Gujarat, with premiums subsidized by the Climate Resilience for All initiative. In 2025, the scheme expanded to over 30,000 participants after adjusting the heat trigger to 42.74°C. Payouts range from 850 to 2,000 rupees ($21–$42) per heat season, depending on temperature severity. India’s extreme heat has caused severe economic strain, with 247 billion labor hours lost in 2024, costing nearly $194 billion, per Lancet Countdown. Agriculture and construction sectors were hardest hit, and climate change is worsening heatwave frequency. Parametric insurance, which bypasses individual damage assessments, is seen as a scalable solution to protect vulnerable populations from climate impacts like heat and heavy rainfall. Nagaland’s government has already insured its entire population against rainfall-related losses using a similar model. India’s federal government is exploring broader adoption to supplement existing insurance mechanisms. Go Digit, which has covered over 50,000 people since 2023, reports growing demand for parametric schemes, including those tied to air quality. For seamstress Rakhi Gulshan Singh, the payouts—though small—provide critical relief. ‘It gives some relief,’ she said, noting that operating a sewing machine indoors intensifies heat exposure. The scheme’s success hinges on practical thresholds set via historical weather data, ensuring payouts align with real-world hardship.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.