By Suma Pathy, Population Services International (PSI), India

Urbanisation has led to an increase in on-demand services and is driving gig-work in India with 7.7 million people working in companies providing ridesharing, food delivery, e-commerce and home services. The quasi-formal nature of gig work, while providing flexibility, often increases workers’ vulnerability. This includes long work hours, low and unpredictable wages, absence of legal contracts, inadequate social protection, and little to no access to health insurance or paid leave. Gig-workers are on the road 8-10 hours a day, often without breaks, exposing them to high ambient temperatures and pollution. Studies show that gig-workers in Indian cities experience significant heat stress and are exposed to particulate matter far exceeding WHO standards.

In 2022, Population Services International (PSI) under the USAID-funded urban health project, Samagra, partnered with Entitled Solutions to design an online health benefits platform for gig-workers while also accommodating employer requirements. As we worked closely with gig workers and their unions, it became evident that the growing impact of climate change, particularly heat stress, was severely affecting the health and livelihoods of these workers and their families.

In this context, PSI landscaped solutions available in the market that could address the dual challenges of adverse health and livelihood impacts caused by heat and other climatic stressors. Our expertise in the health insurance space, and the specific needs and context of outdoor workers connected through a technology platform, PSI explored the possibility of applying insurance-led financial solutions to improve vulnerable urban populations’ resilience to climate change. This guided us to an innovative form of insurance – parametric insurance. Unlike traditional insurance, which assesses losses after they occur, parametric insurance operates on a predefined set of parameters measured by credible sources. When these specific conditions are met, such as extreme temperatures or heatwave days, the insurance triggers an automatic payout, providing immediate financial relief to those affected. PSI conducted a rapid landscape of other, albeit limited, experiences of parametric insurance in the context of the needs of impacted populations and the insurance sector, which has steered us in the direction of developing a modified product construct.

We recognise the limitations of applying a rigid set of predefined parameters. Designing a customised approach that ensures a broader range of individuals impacted by extreme weather conditions are covered, not just those who meet specific parameters. This adaptation allows the solution to better reflect the diverse realities faced by vulnerable populations during climate emergencies. Building on this, we are developing an integrated indemnity-parametric product. In this model, parametric insurance serves as a foundational layer activated by certain conditions (e.g., maximum temperature), followed by a secondary add-on layer of health insurance linked to climate-related impacts, such as dehydration during heatwaves. Our approach combines both parametric and traditional coverage, ensuring more comprehensive protection for those affected by extreme weather events.

The pan-India, and in some cases, cross-country, reach of gig platforms, makes parametric insurance with our city-level customised solution, a feasible tool for addressing the health and livelihood impacts of climate change on this growing urban workforce. We are employing a participatory approach to designing this product(s) by closely working with both workers and platforms, and with other stakeholders including the government, municipalities, workplaces and insurance companies.

Disclaimer: The views expressed in this piece are those of the author/s and do not necessarily reflect the views or policies of AIDMI.