Heat Insurance: Rs 3,000 for Workers Exposed to Extreme Heat
Digit Insurance has initiated payouts for migrant laborers in Noida due to extreme heat, utilizing a parametric insurance model that triggers payments when temperatures exceed specific thresholds for consecutive days. The insurance company, in partnership with K M Dastur Reinsurance Brokers and Jan Sahas Foundation, is offering this heat-index based cover to workers across Delhi, Noida, Ghaziabad, Gurgaon, Faridabad, and Lucknow.
The policy pays up to Rs 3,000 when temperatures cross thresholds for five consecutive days, with an additional payout if the breach lasts 10 days. The threshold temperatures range from 42 to 43.7 degrees Celsius, varying by city. Many of the covered workers depend on daily wages and are exposed to heat-related risks such as heatstroke. In 2024, India recorded 67,637 suspected heatstroke cases and 374 deaths.
The cover also includes a hospitalization cash allowance of up to Rs 5,000 for any accidental bodily injury or illness during the coverage period, regardless of temperature. Jan Sahas Foundation is bearing the premium for the identified migrant workers. This is Digit Insurance’s second collaboration with KMD and Jan Sahas. The three had earlier partnered to offer AQI-based parametric insurance to daily wage workers in Delhi-NCR.
This innovative insurance model is a crucial step in providing migrant labourers with a much-needed safety net against extreme heat. As Adarsh Agarwal, chief actuary and product officer at Digit Insurance, noted, “Digit’s heatwave parametric insurance is a crucial step in providing migrant labourers with a much-needed safety net.”
The initiative follows a similar policy introduced by ICICI Lombard in May 2023, in collaboration with Swiss Re, for 50,000 women labourers across 22 districts in Gujarat, Rajasthan, and Maharashtra. That policy paid automatic cash compensation once temperatures exceeded set limits, making it the first Indian initiative specifically addressing heat-related livelihood loss.
