The first-of-its-kind heat insurance for women in India
Heat-exposed workers face a difficult choice: risk their health by working in deadly heat or lose their daily income. Through our first-of-its-kind heat insurance, women in India’s informal sector have a different choice that protects their health and financial security.
The Extreme Heat Protection Initiative (EHPI) takes a two-pronged approach to individual climate resilience.
- It transfers risk through an innovative microinsurance product. The insurance covers lost wages due to reduced or missed productive hours caused by climate-driven extreme heat.
- It also reduces risk through its distribution of tools and resources, including solar lamps, tarpaulin sheets, and water coolers. These tools provide women with immediate relief from the heat. The lamps allow them to work more safely earlier or later in the day when the temperatures have dropped; the sheets provide a barrier from the scorching ground; and the water coolers allow them to remain hydrated throughout the day.
In May 2023, we launched the socially impactful insurance in partnership with the Self-Employed Women’s Association (SEWA) and Blue Marble. In the first year of the pilot, 21,000 SEWA members working across seven trades received coverage. As part of their enrollment benefits, the women also received one of the aforementioned tools to reduce their heat risk throughout the year.
Extreme heat is not just a physical threat but also a significant financial burden. By safeguarding income, the Extreme Heat Protection Initiative address key financial determinants of health, reducing the potential for illness while empowering women to maintain and utilize assets without worrying about an unexpected loss in income because of heat.
Why do we need climate insurance?
Climate disasters impact economies, ecosystems, and individuals. However, women are especially vulnerable. Globally, women earn less, are more reliant on natural resources, and have lower rates of land ownership. When disasters strike, the consequences and aftermath can push many into poverty.
Climate insurance, however, offers a significant opportunity to reduce the catastrophic impact of climate change. On an individual level, the coverage enables a timely recovery, especially for women. On a societal level, these solutions offer a formal recognition of climate risk and enable future efforts to scale and invest in resilience.
The parametric insurance for heat
The science-based approach to insurance
The parametric insurance product approaches heat data in an innovative way. The policy is linked to satellite data to automatically detect extreme heat conditions. When the appropriate conditions are met, the policy is triggered to protect the livelihoods of women while reducing their heat exposure.
The co-benefits of climate insurance
One of the key benefits of this program was financial inclusion. An estimated 20 percent of women across India lack access to a bank account. While access to formal banking is limited, it is a powerful way to improve gender equality. When women have equal access to banking, they can control their own finances and access economic opportunities like loans and investments. The Extreme Heat Protection Initiative helped nearly 6,500 members open new bank accounts or transform previously inactive accounts into active ones, empowering women with financial agency.
Regular payouts for financial security
The Arsht-Rock Resilience Center ensured that the local knowledge and expertise of SEWA was matched with the private sector partner, Blue Marble, to design for scale. This approach is reflected in the structure of the insurance. Instead of designing for a single end of the season payout—as is done traditionally with seasonal insurance—we collaboratively designed the product for six shorter payment periods. SEWA members are most often critical earners for their family. When they lose a day’s income, there are many time-sensitive expenses. They cannot afford to wait weeks for coverage. Our pilot initiative shows how social impact insurance must be adapted to reflect the needs of its beneficiaries.
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