How a novel heat-microinsurance program launched in Gujarat, India protects informal female workers by replacing income lost due to climate-driven extreme heat events.

by Aditi Desai, ‘24 for Annotations Blog

Last summer, I visited my grandparents in Gujarat, India—a state located on the Western coast of India. I went on my own and found myself following my grandmother around as she engaged in her day-to-day errands. She spent much of her days outdoors, under the blazing Indian sun, traveling across town to pick up groceries, deliver messages to friends, and meet relatives. I recall watching her wipe her forehead every hour or so because of the light sweat she’d break into after walking for a few minutes. 

The heat has gotten worse, beta (child), she told me as I spoke to her on the phone last week. She told me a story of her friend, Naveena, who helped her husband out on their farming plot. “Naveena said being out all day makes it feel like your body is on fire—and when she drapes her sari over her head to block the sun, it feels even hotter. By the time she takes a sip of her water, it’s boiling.” She ended the story with a line that encapsulated Naveena’s emotions: “We are living, but it sometimes feels like we are dying.”

Naveena isn’t wrong. Thousands of women in India describe headaches, exhaustion, dizziness, rashes, and fevers to be some of the many symptoms they experience because of the intensifying heat. Since 1980, the number of heat waves (periods of at least three consecutive days during which temperatures significantly exceed the historical average) has increased by a factor of fifty around the world. In fact, India—which is home to one in every six people on Earth, has emitted just over three percent of the planet’s greenhouse gasses, but it will still be among the nations most affected by the climate. 

Heatwaves put a disproportionate strain on India’s poorest women since women are responsible for most of the domestic work in their communities. The walk to the well to fetch water becomes impossibly difficult in the sweltering heat. Lugging pots, jars, and pitchers back to their homes adds to this struggle. Taking care of domestic chores contributes to dehydration and drowsiness that many Indian women have reported in the past few months of the heatwave. In addition to making domestic chores difficult, rising temperatures make employment hard, especially for women. Some examples of health problems that women in the informal sector encounter due to extreme heat include dermatological issues, urinary tract infections, and kidney stones among women who become dehydrated because they lack drinking water or toilets in work sites. What this shows us is that the climate crisis is certainly not gender neutral. Rather, women and girls tend to experience the greatest impacts of climate change, which amplifies the already existing gender inequalities in developing nations around the world. Shalini Sinha, India representative for Women in Informal Employment, a global research network focused on improving conditions for women in the informal economy, noted that “women work outdoors as street vendors, waste pickers—thus running the risk for health harms and income loss during heat waves.”

What this shows us is that the climate crisis is certainly not gender neutral. Rather, women and girls tend to experience the greatest impacts of climate change, which amplifies the already existing gender inequalities in developing nations around the world.

A novel way that some of India’s lowest earning female workers are seeking protection from this blistering heat is through heat-linked insurance. Extreme Heat Income Insurance—a partnership of an organization of informal workers known as the Self-Employed Women's Association (SEWA), an insurance technology firm (Blue Marble), and a nonprofit (the Adrienne Arsht-Rockefeller Foundation). This insurance program is a product paid out when temperatures reach a specific threshold. The pilot program lasted approximately two months and covered 21,000 women in five districts of the state Gujarat, where SEWA has a large membership base. The goal of the Extreme Heat Income Insurance program is to compensate for some of the lost income that comes with extreme weather, rather than to prevent people from working altogether on painfully hot days. However, some industry experts have questioned whether this kind of insurance system will be financially viable in the long-run, in part because of too-frequent payouts due to climate risks escalating faster than predicted. One way of avoiding such constant payouts is for governments to implement better strategies to defend against weather extremes, thus contributing to SEWA’s overall mission of mitigating extreme climate change-related weather conditions. 

When developing this product, SEWA had a limited timeframe to determine exact payout amounts, so they took a simplified approach to develop insurance payouts. In the pilot phase the compensation is triggered after the fact, rather than being based on forecasts. It takes several days to actually receive the compensation. Thus, given the time lag and the need to earn money daily, some members have to continue working regardless. However, the compensation can still be very useful as an income supplement during challenging periods. Not only do the payouts act as income supplements, but also as a necessary stream of income for dealing with health problems that come with extreme weather. The insurance benefits help to keep workers nourished, hydrated, and better cared for.

Since this appears to be the first-ever heat linked insurance product of informal workers, SEWA had to make sure to communicate the benefits of joining such a program to its members in an effective and clear manner. City authorities sent heat alerts by SMS and WhatsApp and put out press releases and billboard messages. Since many individuals in Gujarat are often illiterate, authorities also engaged health workers, community leaders, and radio hosts to communicate messages about this program. The algorithm triggers a payout based on three days of satellite assessed temperature data. For instance, a minimum three day temperature of 112 degrees Fahrenheit would call for a payout. The team behind the new insurance product is hoping to expand the parameters in future interactions. While currently the payout threshold considers only daytime temperatures, for example, a more complex measure in the future could also factor in temperatures at night, humidity, and health impacts. In an ideal situation, a future version could be predictive rather than reactive. Moreover, the longevity of such a product depends on the ability to raise further funds. Parametric climate-linked insurance in low and middle-income countries is a niche, but growing field, primarily subsidized by nonprofits, governments, and donors. Thus, to ensure the sustainability of such an insurance product, creative and effective funding programs will have to be developed. 

Temperatures are already rising across South Asia. In Kolkata, temperatures have already passed 104 degrees Fahrenheit. This year, temperatures are projected to rise throughout the end of summer due to a deficient monsoon season. Thus, the further development and expansion of SEWA’s Extreme Heat Income Insurance Product is crucial to protect female workers in India’s informal sector. However, India—and nations across the world—must be viewing such financial insurance instruments not as permanent substitutes for necessary climate policy measures, but rather as a mechanism to reduce income loss from climate change. After all, there are more consequences of the climate crisis beyond the already significant health and income losses citizens are dealing with.

Meet the Author: Aditi Desai

Aditi Desai is a senior studying at Princeton's School of Public and International Affairs with a minor in Engineering Biology. She is passionate about the intersection of public health and environmental issues and spent her summer working at the Environmental Defense Fund to further these interests. You can reach her at [email protected].