Recent heatwave in India has claimed lives of over 80 people, and over 25,000 people suffered from a heatstroke. The temperatures touched close to 50 in so many areas. Despite these harsh conditions, there were several people who had to do hard labour to earn a living.
It is a difficult choice millions of daily wage labourers face every year in India during extreme weather events – either to stay home and not being able to afford food and medicines, or to work and put their life in jeopardy. More often than not, they choose the latter, and end up facing life threatening conditions to secure meals, education and medicines for them and their families.
During the recent heatwave, around 46,000 women across 22 districts in India were able to make a third choice. They were able to stop working for a few hours daily, thanks to the parametric insurance program they were enrolled in.
What is Parametric Insurance?
Parametric insurance is a type of insurance that pays out when a certain pre-defined metric is hit, for example, a fixed high temperature. This is different from a regular insurance in the way that rather than assessing the loss incurred because of the event, the insurance pays out the agreed upon amount at the occurrence of the event. The company verifies the occurrence of the event using third party data, and once the verification is done, the person covered is eligible for a prompt payout without going through a tedious claim process.
During the recent heatwave, about 50,000 women were enrolled under parametric insurance program by ICICI Lombard Insurance. Among these women, about 46,000 women received a total of $340,000 in payouts in the month of may, allowing them to be cautious about their health, while still being able to afford daily necessities.
The Self-Employed Women’s Association labour union runs this insurance program. The premium for this program is paid for partly by the women enrolled in the program, and Climate Resilience for All, a non-profit, covering the remaining portion. The pilot program launched last year and is set to run until April 2025.
Climate Resilience for All, is supporting this program through development, technical expertise and funding. Kathy Baughman McLeod, chief executive officer of Climate Resilience for All, has claimed that the program is successful and it plans to continue for a few more years. The organisation aims to ultimately sign up 2.9 million members of SEWA to the program, which would allow the plan to be funded entirely by women paying the premiums.
“Our experience is that poor women don’t want charity always,” said Reema Nanavaty, general secretary of SEWA. “Once they see that this program is addressing their dire needs, I’m sure the women would start contributing toward the program.” The eventual plan would see the premium for each woman be about a day’s wage every month, she added.
Talking about the impact of the program, Ms. Nanavaty said, “The biggest value the insurance payment gives them is dignity and self-respect.”
SEWA and Climate Resilience for All teams recognise that insurance cannot solve all the problems, which is why they are also running other campaigns to educate the women on different ways in which they can protect themselves from extreme heat.
