India is grappling with intense heatwaves driven by increased climate volatility, and the people bearing the brunt of these conditions are vulnerable workers who are unable to absorb repeated income shocks, making insurance for climate risk essential rather than optional, says Mohammad Faizan Huq.
Huq is the Associate President – Reinsurance Head of Agriculture, Parametric and Accident and Health (A&H) for broker Howden India. In a recent interview with Reinsurance News, he emphasised that intense weather is “no longer just a climate issue, but an economic one.”
In places like India, which has a large share of gig and informal workers whose livelihoods depend on being physically present and outdoors, Huq underlined that the need for climate risk insurance is vital.
“Climate risk insurance is moving from optional to essential. With increasing climate volatility, vulnerable workers cannot absorb repeated income shocks on their own. To scale adoption, products must be simple, affordable and trusted, with fast payouts and clear triggers. Distribution through employers, platforms, governments and financial institutions will be key.
“Ultimately, climate insurance should sit within a broader resilience framework that links insurance, adaptation and social protection,” said Huq.
As heatwaves become more frequent, longer and intense, gig and informal workers are seeing their working hours reduce, productivity levels drop, and health risks rise.
“Even losing a couple of working hours a day over a sustained heatwave can materially reduce household income. For families already operating with thin margins, this volatility pushes them closer to debt and instability,” said Huq.
He went on to cite figures from the Indian non-profit policy research firm, Council on Energy, Environment and Water, that nearly 57% of Indian districts, covering around 76% of the population, now face high to very high heat risk.
“This is particularly relevant for delivery workers, construction labour, street vendors and other outdoor workers whose earnings are directly linked to daily physical activity,” said Huq.
Some of the most common health risks workers face during extreme heat conditions include dehydration, exhaustion, and heat stress, while the main financial risk is income interruption.
Huq explained: “Most informal workers lack savings, paid leave or social protection, so missed work translates immediately into financial strain. Preparedness remains limited. Awareness has improved, but access to real safety nets, income protection, healthcare cover or employer support, is still minimal or lacking.
“The severity of the challenge was visible during the 2024 heatwave season, when India reportedly recorded over 40,000 suspected heatstroke cases and more than 100 heat-related deaths across multiple states. Such events highlight how climate shocks can quickly turn into livelihood shocks for vulnerable workers.”
For Huq, the issue is that traditional insurance fails to adequately cover gig and informal workers, notably in the context of climate-related risks like heatwaves, as traditional coverage is designed around formal employment, documented income and discrete loss events, whereas Gig and informal work simply doesn’t fit that structure.
“Heat impacts earnings gradually through shorter workdays, lower output and recurring health issues, rather than a single insurable incident. This makes conventional claims-based insurance inefficient and inaccessible for both insurers and workers,” said Huq.
In light of this, we asked Huq whether innovative solutions like parametric insurance or micro-insurance can realistically bridge this protection gap.
“Yes, they can, particularly for climate risks like heat. Parametric insurance works on predefined triggers, such as sustained temperature thresholds, rather than assessed losses. This allows for fast, automatic payouts without complex claims processes. That speed is critical when workers need immediate liquidity. India’s strong digital infrastructure, weather data and platform-based workforces make these solutions increasingly viable, especially when combined with broader adaptation measures,” he said.
As the frequency and intensity of heatwaves in India rise, Huq noted that, importantly, re/insurers are starting to recognise that heatwaves have been structurally under-modelled.
“Unlike floods or cyclones, heat does not destroy assets overnight; it erodes resilience gradually. In India, where a large share of the workforce is exposed to outdoor heat, this cumulative impact on health, productivity and economic stability is significant. Heat is now being viewed not just as a weather event, but as a systemic stressor with long-term economic implications.
“From a risk perspective, the concern is not only mortality or healthcare costs, but also the cascading impact on labour productivity, supply chains and economic output. The International Labour Organization has previously estimated that heat stress could result in the equivalent of over 34 million full-time job losses in India by 2030. For reinsurers, this highlights how heat risk is increasingly interconnected with economic resilience and social stability, rather than being treated as a standalone weather exposure,” said Huq.
To end, Huq offered some thoughts on what role employers, platforms, and policymakers can play in building a safety net for vulnerable workers against climate-induced disruptions.
“This requires coordinated action. Employers and platforms can offer flexible work arrangements, hydration support, heat advisories and basic climate-linked protections. Policymakers play a critical role through stronger heat action plans, urban cooling measures and public–private partnerships for climate risk financing. Long-term resilience will depend on combining immediate worker protections with structural solutions in urban planning and infrastructure.
“India has already expanded Heat Action Plans across 23 heat-prone states in collaboration with NDMA and IMD, covering measures such as early warning systems, public advisories, cooling centres and emergency response protocols, especially across Tier-2 and Tier-3 cities where informal workforce exposure remains high.”
