The National Disaster Management Authority (NDMA) of India held a workshop last Friday (13 Sep), aimed at ‘evangelising’ parametric insurance adoption in the country, the authority said.
Parametric insurance pays a set amount based on predefined parameters, such as wind speed or heat, rather than on the actual losses incurred. One advantage is quicker claims settlement.
The meeting, which included public, private, and NGO stakeholders, had a focus on persuading state governments, large donor firms, and Self-Help Groups (SHGs) to consider more widespread use of parametric insurance.
However, The Economic Times of India reported that discussions also centred around issues that might hinder the uptake of these solutions, including the source of premium payments, large-scale participation, and high policy premium costs.
At the workshop, SEWA and the All-India Disaster Mitigation Institute (AIDMI), Ahmedabad, two non-profit organisations, revealed their designs for parametric insurance offerings in 2023 and 2024, which cover extreme heat. ICICI Lombard also provided insights into the business aspects of understanding and implementing such products.
Apart from discussions surrounding parametric insurance, the NDMA presented five disaster risk insurance aspects during the workshop. These include a wide range of tailored products, the best and most affordable prices, careful identification of target groups, strategies for obtaining policy support, and light-touch regulation.
The NDMA also said it plans to hold a workshop on disaster risk insurance on 20th September 2024.
