As deadly heat waves sweep the globe, a new initiative in India is experimenting with parametric heat insurance, in what experts hope will prove an innovative financing model to help climate-vulnerable communities mitigate losses from extreme heat.
Run in partnership between the nonprofit Climate Resilience for All and the Self Employed Women’s Association, or SEWA, a women’s labor union in India, the heat insurance scheme was piloted this summer and aims to protect workers against heat-induced financial losses.
With climate change set to increase both the frequency and severity of heat waves, experts are increasingly turning to insurance to provide essential financial protection for the most vulnerable — but emphasize that risk-transfer tools should not replace other forms of development assistance, and need to be combined with risk reduction measures if they are to remain sustainable in a warming climate.