Across India’s sweltering summers and sun-drenched deserts, an insurance revolution is gaining ground. Parametric insurance — a trigger-based coverage that pays out automatically when precise environmental thresholds are met—safeguarding vulnerable groups and protecting cash flows for Solar Firms.
How it works
Parametric insurance activates payouts without any paperwork once a predefined trigger—like temperature, solar irradiance, or wind speed—is breached. It relies on third-party data which makes claims processing faster and hassle-free.
Migrant Workers get speedy relief from Heatwaves
During summer 2025, migrant workers in Noida were covered under a pioneering parametric plan by GoDigit and Jan Sahas. When maximum daily temperatures exceeded 42 °C for five consecutive days in May 2025, each worker automatically received ₹3,000—without filing any claim or submitting proof.
This initiative covers six North Indian cities—Delhi, Noida, Ghaziabad, Faridabad, Gurgaon, and Lucknow—with payouts powered by IMD data.
Renewable Energy Firms level out Cash Flows
Solar Firms in Rajasthan and Gujarat are securing irradiance‑linked parametric covers to smooth out cash flow during low-output periods for building downside protection. Wind projects across southern India are also tapping into wind‑speed‑based policies.
Parametric Insurance: Gaining momentum in India
The demand for parametric insurance is on the rise as investors and lenders are looking for investment protection in climate-sensitive assets. Parametric coverage is expanding fast across agriculture, renewables, and underserved worker groups—growing at a CAGR of 11.3% in India, outpacing global trends.
Parametric insurance has evolved into short, modular, and cost-efficient schemes, backed by global reinsurers like Swiss Re, Munich Re, and AXA offering scalability to insurers. Cutting-edge AI and localized climate modeling are also enhancing trigger design and pricing accuracy for Trigger-Based Insurance to gain foothold in India.