Parametric insurance claims rise amid extreme weather events

Indian insurance companies are recording a rise in parametric claims—paid out automatically when a predefined event meets a specific threshold (parameter)—and though awareness about the product is low, they expect such business to grow due to the impact of climate change.

- AATHIRA VARIER

GoDigit General Insurance recently made its first parametric insurance payout of ₹3,000 (per claim) to migrant labourers in Noida when the temperature breached its threshold of 42 degrees Celsius. It offers heat-index-based parametric insurance to migrant labourers in six cities in partnership with K M Dastur Reinsurance Brokers and Jan Sahas Foundation.

Bajaj Allianz General Insurance made claim payouts of ₹500 to ₹2,000 to policyholders in May for early monsoon. Its Climate Safe product provides cover against heatwaves and excessive rainfall in 200 cities in the country (temperature parameter is based on 30 years of historical weather data and algorithmic analysis).