Many in Kolkata buy India’s first climate insurance; heat, rain & cold risks included in policy

KOLKATA: Over 600 Kolkatans have bought the country's first 'climate change' insurance policies rolled out by a private insurer offering to compensate the customers for climate-related income loss or increased expenses.

Another private player and a PSU are set to launch the scheme - parametric policies in insurance jargon - soon.The short-term scheme targets house owners, officegoers, auto and cab drivers, shop owners, delivery agents, home service professionals, gig workers and event attendees. The climate risks include extreme heat, cold waves, and excessive rainfall, and the policies covers increased living costs due to higher electricity use, unexpected commute cost, reduced sales due to extreme weather, supply chain delays due to flooding, leaks from prolonged rainfall, accidents caused by excessive rain, loss of income for daily wage workers, and event cancellations due to adverse weather.The insurer, Bajaj Allianz General, has separate heat, rain, and cold index policies under its climate-risk products. In Kolkata, it is primarily focusing on the heat index product and has received positive response from the household category, company officials said.ICICI Lombard is likely to introduce its climate products in the state soon while National Insurance Company will roll out 'parametric' policies in Kolkata and a few other vulnerable cities.

Climate experts say Bengal, Kolkata in particular, is among the most climate-vulnerable regions in India due to its unique geography, dense population, and rapid urbanisation. The state faces a high risk of cyclones, floods, sea-level rise, and extreme heat events, says Sanjay Vashist, who is part of the committee entrusted with drafting Kolkata's Climate Action Plan.Elaborating on the need for climate change products, Bajaj Allianz MD & CEO, Tapan Singhel, said, "Climate change is no longer a distant threat.

It is a reality that affects our daily lives in visible and often disruptive ways." Partha Roy of Northern Avenue, among those who have bought a heat index policy, said his decision was prompted by the five-digit electricity bill that he received for May. Ashish Agarwal, agri business head at Bajaj Allianz, said they had sold close to 650 heat index products in Kolkata so far. For these products, policy duration is from one day to one month and has to be purchased three days ahead of the risk date or the week or month, he said.A company official explained, "For a particular location, we depend on IMD data for the past 30-35 years to arrive at a 'trigger point'. In big cities like Kolkata, various locations may have different trigger points. Real-time climate data is used to determine payouts. When predefined conditions are met, the policyholder receives payout without the need for a lengthy claims process."