Unique heat insurance protects self-employed Indian women

Women who work in India’s informal sector now have access to a first of its kind ‘heat income micro-insurance” that will help them recover wages lost due to climate-driven heat. It is yet another demonstration of the innovation driven by the 50-year-old Self-Employed Women’s Assocation (SEWA). Self-employed women in India account for 93% of India’s labour force.

The Extreme Heat Income Insurance, activated when specific extreme heat conditions happen, was developed by the Adrienne Arsht-Rockefeller Foundation Residence Center (Arsht-Rock), Blue Marble, and SEWA. Arsht-Rock also has endowed ‘chief heat officers’ in cities around the world.

It’s really different from how insurance usually works. The women pay a $3 enrollment fee, equivalent to about a day’s wages, and if local temperatures average above 90 degrees for three straight days, they will receive a digital cash transfer worth a few days’ wages that lets them to stay home from work.

Development of the innovative program began with a two-month pilot phase in April 2023, when Arsht-Rock, SEWA, and Blue Marble targeted 21,000 SEWA members in Ahmedabad across a range of occupations – from salt pan miners, waste recyclers, and head loaders, street vendors to farmers, ship breakers, construction, and home-based workers. But even though India suffered through an extended heat wave for most of the spring, the temperature never got high enough to trigger a payout.

SEWA, which was formed in Ahmedabad in 1972, has 2.5 million women members and is the single largest women worker’s central trade union in India. “Our significant contribution to the nation’s economy is largely uncounted, undercounted, or invisible,” says SEWA. Its approach is to “address the needs of the worker as a laborer, as well as a woman. This integrated and holistic view of workers has given birth to new and innovative ways to fight poverty and vulnerability. Our goals are full employment and self-reliance.”

“For vulnerable women on the margins, enduring extreme temperatures for three days directly amplifies the chances of sickness or death,” said Sahi Hebbar, a physician attending to the women in SEWA who work jobs in construction, trash collecting and shipbreaking. Insurance payouts allow them to buy things like gloves to protect their hands from scorching hot metal tools, or fans to stay cool and avoid heat exhaustion. Had the insurance scheme been in place last year, it would have led to averaged payouts of $28 per person, said Blue Marble.

The Extreme Heat Income Insurance is the first investment in Arsht-Rock’s Cool Capital Stack, and the first commitment in the Global Climate Resilience Fund for Women announced Feb. 16, 2023, by SEWA Director Reema Nanavaty and former US Secretary of State Hillary Clinton.

Parametric climate-linked insurance in low- and middle-income countries is a niche but growing field, primarily subsidized by nonprofits, governments, or donor countries. The Kerala Cooperative Milk Marketing Federation and the Agricultural Insurance Company recently launched a heat-linked insurance scheme for cow and buffalo farmers, as high temperatures reduce milk production.

SEWA photo

SEWA emphasizes that its new insurance policy is one of multiple measures to adapt to rising temperatures. A complementary one is its climate fund, a pooled savings mechanism that helps members to save for items like home insulation materials and cool roofs, which can reduce temperatures by several degrees. Arsht-Rock and SEWA are also providing free shade tents and coolers and SEWA is supporting members with affordable techniques like training them to counter dehydration by preparing oral rehydration solution at home.

Reinsurer Swiss RE reported that sales of parametric product jumped 40% between 2021 and August 2022 and insurance analysts estimate the market, valued at $11.7 billion in 2021, could reach $29.3 billion by 2031, Reuters reported earlier this year.


Extreme heat is here. Can insurance help protect us? Grist, Aug. 4, 2023

Heat insurance offers climate change lifeline to poor workers. Reuters, May 19, 2023

Heat microinsurance launched in India to protect women workers Reinsurance, Feb. 17, 2023

The new type of insurance that protects Indian women during extreme heat. Forbes, May 27, 2023

An Indian city’s battle against extreme heat. Bloomberg, Jun. 19, 2023

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