India’s Heat Insurance Plans: Look Promising, Need Behavioural Shifts, And A Lot More..
A microinsurance product is trying to support Indian women workers in the informal sector by covering wages lost due to extreme heat. Lisann Dias inquires
It was the summer of 2024, and some parts of India felt hotter than ever. Bhagyashree*, 32, a housekeeper at a bank in Ahmedabad, Gujarat, suffered a heat stroke on her way back home. She had to be hospitalised, and as a result, missed seven days of work, losing around ₹3,500 in wages. In addition, she had to spend ₹400 on medical treatment, a significant amount for daily wage workers like her.
Conditions like these are rising in hops and jumps as we almost touch a global warming of 1.5°C - we are somewhere between 1.3°C and 1.4°C now. It is estimated that at 1.5°C, almost 14% of the world population will be exposed to severe heat waves at least once every 5 years. At a global warming of 2°C, 37% of the word population will be affected. Major part of this impact is borne by wage earners, daily labourers, vendors; the homeless.
In most of India’s informal urban settlements, like where Bhagyashree lives, the summer heat is unbearable. Bhagyashree’s home has tin roofs; poor ventilation trap heat inside their homes, making living conditions harsh.
An Asian Development Bank study from 2022 records that houses in lower-income settlements are overcrowded, not particularly designed for hot climates, and made of low-cost materials that conceal heat. Most such households cannot afford air-conditioning; using a ceiling fan helps only until the temperature is about 45°C with 10% relative humidity or about 40°C with 60% relative humidity.
All of these mean, summers bring additional expenses– higher electricity bills, cost of extra water, cost of applying lime coatings to roofs, cost of loss of income.
What is a heat insurance and how might it help
To cover these expenses and any loss of income triggered by climate-driven extreme heat, several organisations across India have launched a parametric heat insurance program that presently covers 276800 women.
“Volunteers go door to door to raise awareness about climate risks and their impact on livelihoods,” explained Bhavana Maheriya, Program Manager at Mahila Housing Trust (MHT), a grassroot organisation that equips women to improve their overall living conditions. In 2024, MHT partnered with Global Parametrics, Digit Insurance, and Howden India to extend insurance coverage to 26,800 women in the cities of Ahmedabad, Surat, and Vadodara.
The previous year, Self Employed Women’s Association (SEWA), a trade union centre for women workers in the informal sector, in partnership with Climate Resilience for All, Swiss Re, and ICICI Lombard, had already insured over 21,000 women across five districts of Gujarat. SEWA has since scaled up to 34 districts across Gujarat, Maharashtra and Rajasthan, covering 2,50,000 women in 2025.
In 2025, more entities joined these forces: Jan Sahas, a community-centric organisation focused on the well-being of migrant workers extended heat coverage to their members in cities of North India; Bajaj Alliance, a private insurance company, introduced the product to the general public in the commercial market.
How does the insurance work?
UpBeat spoke to representatives from SEWA and MHT. While the two organisations may adopt different methodologies and technologies, the underlying idea for implementation remains the same.
Historical data around daily temperatures from the last few years are analysed; trends such as the maximum temperature and how many times it has occurred in the city are observed. Based on these data, the insurers arrive at a threshold temperature for each city where the insurance schemes are operational.
Dr. Sahil Hebbar, Senior Coordinator at SEWA shares - “A threshold temperature is determined using this historical data, in consultation with our partners. It is selected such that the probability of it being breached is once in two or three years.”
The women who buy the insurances are generally those with whom the NGOs have worked for a number of years through other interventions, such as cool roofs or microfinance. Specially designed games used during focus group discussions plus various awareness programs help women understand how heat affects their health, productivity, and income.
The women are then introduced to the concept of heat insurance and asked whether they would be interested in such a scheme. They are also asked how much they would be willing to pay as a premium. The responses typically ranges between ₹200 and ₹500, explains Bhavana. The NGOs accordingly set the women’s contribution between ₹300 and₹350.
At SEWA, grassroots leaders scan the bank passbook and Aadhaar or PAN card of the women who applied for buying the insurance; the documents are then submitted to ICICI Lombard, their insurance partner. The premium amount is ₹705, with ₹300 paid by the buyer and ₹405 paid by Climate Resilience for all, one of the partners of the program.
For MHT, Howden India fills in for the second part of the insurance premium after women submit their bank account details along with their Aadhaar or PAN card. ₹352 is deducted directly from their accounts as a partial premium. “All the women enrolled hold an account with the credit cooperative owned by MHT,” Bhavana says.
How much heat is too much heat?
Each city has its own threshold temperature, which stays constant over the years. In Ahmedabad, if the temperature crosses 43.7°C for two consecutive days, each insured woman receives ₹750. If the higher threshold of 44.1°C is breached for two consecutive days, the payout is ₹1,250.
The beneficiary can receive both payouts once per season, with the maximum benefit capped at ₹2,000. Vadodara and Surat have thresholds of 43.6 degrees Celsius and 37.8 degrees Celsius for two consecutive days, respectively.
Whom are these insurances helping?
Payout— the amounts the women receive if the temperature reaches the threshold and they are forced to stay at home— are determined based on an assessment of additional expenses incurred during the summer months.
“A minimum of two consecutive days of temperature breach is required before payouts begin,” explained Sahil . “From the second day onwards, the payout starts happening at Rs 300 per day. So, for five days of temperature breach, it amounts to ₹1,200.
A white paper published by MHT says that – on May 21 and 22, 2024, the temperature in Ahmedabad crossed 43.7°C for two consecutive days. As a result, payouts were made to around 2,000 women in the city.
A total premium of $1,15,000 was collected from 26,000 women in Ahmedabad, Surat and Vadodara, in 2024. The total payouts made that year were $18,750 to the 2,000 women in Ahmedabad, the white paper says.
Bhagyashree was one of the beneficiaries.
While she was grateful for the cash support to tide over the critical time, Savita, a homemaker in Ahmedabad who also received the insurance coverage wasn’t satisfied with the amount. She says, “ I used the payout to purchase medicines and partially cover the electricity bill; but each rupee has more value for us and it better runs longer.”
Additionally, in 2024, temperatures triggered in 17 out of 22 districts that SEWA were servicing; 46,339 members received a total payout from SEWA amounting to $350,859.
The insurance operates between the months of April and June. Applicants must resubmit their bank account and Aadhaar or PAN card details and pay the premium to avail the scheme in the following year.
Women use the payout money for various purposes, such as to invest in their livelihoods by buying fertilisers, equipment, livestock fodder, or to meet health expenses, Sahil added. “It is convenient because there is no surveyor or middle party involved to assess any damage.”
What happens when the temperatures aren’t breached?
While temperatures in Ahmedabad breached the threshold last year, they did not this year. Both Surat and Vadodara saw no threshold breaches in either year.
“This year, a day of extreme heat was often followed by a day of rain, which meant we could not meet the criteria of two consecutive days of temperature breach,” explained Bhavana from MHT. “We received many complaints that the heat was unbearable, yet no payouts were received.”
Selling the heat insurances to women who traditionally have little or no access to formal financial systems or insurance is already a challenge.
“We conduct awareness sessions, but when they don’t receive the payout, they become hesitant to renew the insurance the following year because they don’t see its value,” she says. Sahil agrees: “The model currently only considers temperature. This affects trust in the product, making it harder to generate demand; this in turn raises concerns about long-term sustainability.”
Sometimes the data entry process too is fraught with errors, such as incorrect bank details or identity card numbers. Members don’t receive payouts till these are corrected. “At least 10-15 members suffered due to this in both 2024 and 2025,” Sahil adds.
Another challenge lies in data discrepancies.
MHT relies on data from Aerify, a UK-based temperature monitoring system, to set their thresholds. Even though the Indian Meteorological Department’s (IMD) data might seem to be more reliable, it’s behind a paywall and we don’t have the funds to access it,” says Bhavana. MHT claims to have found a two to three-degree difference between the two datasets. “If we had used IMD data, the thresholds would likely have been triggered in those cities,” she says. MHT is keen on ways to collaborate with IMD in future.
Can the program run year after year?
As of now, the insurance premium is heavily subsidised, but this may not be possible to achieve year after year.
Without subsidies, the premium can rise to ₹700, which in many cases is higher than a day’s wage. Moreover, payouts are not guaranteed every year. “We hope that as women begin to see the benefits of the insurance, their willingness to contribute will increase, and they will eventually cover the full premium themselves. It’s a long-term behavioural change,” reflects Bhavana.
“It’s not going to be financially sustainable if it remains just an insurance product,” echoed Sahil. “If the insurance doesn’t trigger, and it’s not designed to trigger every year, members will start questioning the benefits.”
What might make this insurance support work?
Sahil adds: “We need to look at building a corpus that can be invested wisely, with the interest accrued used to keep the program running sustainably. The model could also scale rapidly if it’s linked with government health schemes.”
What is needed is an insurance-plus model that integrates climate-health responses, early warning systems, adaptation and mitigation measures, and even mental health support. There’s a need for a bouquet of services that ensure members continue to receive value and are encouraged to stay invested in the program, even when payouts aren’t triggered.
“The idea is to find a sweet spot where the insurance companies don’t go bankrupt, and the value of the insurance is received in the community,” he says. “If the community receives the other services, they are less likely to be discouraged when the payout does not occur.
In 2025, SEWA included a cash layer with a lower threshold, so members received at least ₹400 in grant-funded payouts. This was pooled from member and donor funds.
Despite MHT’s presence in ten Indian states, expansion has been slow. “We haven’t been able to collaborate with financial institutions in other cities, which has limited our ability to scale,” said Bhavana.
Parametric heat insurance does not feature in the heat action plans of any Indian city.
Meanwhile, in Ahmedabad, Bhagyashree used her payout from last year to pay this year’s premium.
** Bhagyashree, like many others in our country, goes by one name.
The heat insurance scheme seems to be a good start to support our daily wagers. How else can the work force be supported when the temperatures soar or extreme weather phenomena, like flash floods and cyclones, disrupt our livelihoods and daily income?
If you have an idea for a better solution, or if you know of organisations and individuals who are working to address these issues mentioned in the article, let us know. If you are a citizen journalist, we will be happy to work with you.
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