In India, heat-triggered insurance offers 'some relief'
India’s first parametric heat insurance scheme, launched in Ahmedabad, automatically pays out to workers like Lata Solanki when temperatures hit 43.72°C for two consecutive days, offering financial relief amid extreme heat. The program, covering over 30,000 women in Gujarat, aims to mitigate economic losses from heatwaves, with payouts ranging from 850 to 2,000 rupees, while national discussions explore expanding such schemes to protect vulnerable populations from climate impacts like heavy rain and air pollution.
India’s extreme heat has forced workers like 42-year-old Lata Solanki to choose between health risks and lost income during scorching summers. Now, a parametric insurance scheme—triggered by two consecutive days above 43.72°C—provides automatic payouts, helping workers like Solanki stay home without financial strain. The program, launched in 2024 by non-profit Mahila Housing Trust (MHT) and insurer Go Digit, paid 750 rupees to Solanki in 2024, offsetting her 354-rupee premium and covering part of her lost earnings during a 20-day illness in 2023. The scheme targets women workers in Ahmedabad, where temperatures often exceed 45°C, with surveys revealing income losses of 2,000–2,500 rupees during peak summer months. In 2025, enrollment grew but no payouts occurred as thresholds weren’t met; this year, the trigger was lowered to 42.74°C to ensure broader coverage for over 30,000 participants. Payouts range from 850 to 2,000 rupees, paid once per season in September, with higher amounts tied to extreme temperatures. Unlike traditional insurance, parametric models use predefined triggers—like heat, rain, or pollution—eliminating delays from damage assessments. Nagaland’s government adopted a similar approach in 2024 to insure its entire population against rainfall losses, while India’s federal government is reviewing ways to expand such protections nationwide. Go Digit’s actuary, Adarsh Agarwal, noted demand is rising, with over 50,000 people covered since the firm launched parametric schemes two years ago, including heat and air-quality policies. Extreme heat cost India an estimated 247 billion labor hours in 2024, equivalent to $194 billion in losses, per Lancet Countdown research. Agriculture and construction sectors were hardest hit, with climate change intensifying heatwave frequency. The Ahmedabad scheme, funded by the Climate Resilience for All initiative, marks a pilot for scalable solutions to climate vulnerability, offering ‘some relief’ to workers facing unbearable conditions.
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