World's First Heat Insurance Protects Livelihood From Extreme Climate

Under the scorching sun of the bustling Indian market, Kamlaben Ashokbhai Patni anxiously observed her wooden stall, adorned with brass jewelry. The relentless heat posed a threat to her livelihood as the soaring temperatures tarnished the metal and weakened the adhesive of plastic pearls. "As the heat intensifies, the value of the jewels fades away, rendering them worthless," lamented the 56-year-old mother of four, reminiscing about a late April day in Ahmedabad when the mercury climbed to a blistering 38 degrees Celsius (100F). Ahmedabad, a city in western India, experienced a record-breaking 48 degrees Celsius (118F) in 2016, and last year's peak nearly touched 46 degrees Celsius (114.8F). The rising temperatures posed a significant risk to businesses like Patni's. However, she has found hope in one of the world's pioneering initiatives – an insurance program designed specifically to protect individuals from the perils of extreme heat. Launched by the nonprofit Arsht-Rock Foundation Resilience Center in collaboration with microinsurance startup Blue Marble and a trade union, this innovative scheme offers a lifeline to the vulnerable. Patni is among the 21,000 self-employed women in Gujarat state who have enrolled in the program. If temperatures exceed historical averages and persist for three consecutive days, she will receive a modest payout to help mitigate the financial impact of lost income. Unlike traditional insurance, this "parametric" insurance eliminates the need to prove losses, ensuring speedy payouts within days of reaching a predefined threshold that designates extreme conditions, such as wind speeds or rainfall. At the annual climate talks held in Egypt last year, nonprofits appealed to wealthier nations to provide financial support for parametric insurance as a means of compensating victims affected by worsening weather extremes. Although still relatively niche, the concept is gaining traction. As the world grapples with the escalating impact of climate change, innovative solutions like heat insurance offer a glimmer of hope for those most vulnerable to its effects. By providing timely assistance and financial protection, these initiatives could prove instrumental in safeguarding livelihoods and fostering resilience among marginalized communities worldwide.