AQI-based insurance policy: According to the information shared by the company, the policy will be offered to 6,200 migrant workers in the Delhi NCR region.
AQI-based insurance policy: Delhi’s air quality worsens during winters with the air quality index (AQI) crossing much above the 400 mark, triggering the ‘Graded Response Action Plan (GRAP)’ which enforces various restrictions. The restrictions under the GRAP depend on the air quality and stage 4 measures restrict the ban on construction activities among others.
This directly impacts the livelihoods of migrant labourers working in Delhi-NCR. To provide relief to such workers, Go Digit General Insurance Limited ( or Digit Insurance) has partnered with KM Dastur Reinsurance Brokers (KMD) to provide one of India’s first AQI-based parametric insurance.
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What is parametric insurance?
Parametric insurance provides claim payouts based on the occurrence or breach of a specific event or metric (like weather, pollution levels, natural catastrophes, etc) rather than the occurrence of actual loss.
Unlike traditional insurance products like motor or health where the claim process is longer, parametric insurance claim payout is quick and efficient as the claim payout gets immediately triggered if a threshold or parameter (typically tracked independently) is crossed or breached.
How much compensation workers will get?
This Digit Parametric Insurance Policy will consider claims if the daily AQI of Delhi breaches 400 beyond two strikes. It will compensate them up to Rs 6,000.
According to the information shared by the company, the policy will be offered to 6,200 migrant workers in the Delhi NCR region.
“Various government and court orders and guidelines prescribe ban on construction activities if Air Quality Index (AQI) of Delhi crosses hazardous pollution levels, directly affecting the livelihoods of migrant and local construction workers. This policy will directly compensate construction labourers up to Rs 6,000,” the company said.
When will workers get a claim?
The claim payout will automatically trigger if the daily AQI exceeds 400 more than two times (defined as a strike). A strike would be considered to have occurred if daily AQI crosses 400 for at least 3 out of the previous 5 days. There will be a minimum gap of 25 days between each strike.
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“Parametric insurance is a simple, efficient and transparent way to address the financial vulnerabilities of workers caused due to environmental challenges in the region,” Nikhil Kamdar, Appointed Actuary, Digit Insurance.
Earlier in 2024, Digit Insurance had also offered excess heat-related parametric insurance to women labourers in Gujarat.
