Go Digit General Insurance Limited, in partnership with K.M. Dastur Reinsurance Brokers, has launched an Air Quality Index (AQI)-based parametric insurance policy tailored for migrant workers in the Delhi NCR region. The policy is designed to mitigate wage losses for construction workers affected by government-imposed construction bans during periods of severe air pollution.
Specifically, when the AQI in Delhi exceeds 400 on more than two occasions, the policy will trigger payouts of up to Rs 6,000 for 6,200 affected migrant workers. The policy defines a “strike” as the AQI surpassing 400 for at least three days out of the preceding five, with a mandatory 25-day gap between each strike.
The innovative insurance product aims to provide direct financial support to construction workers who face significant income disruptions due to pollution-related construction bans. These bans are often enacted through government and judicial orders to combat hazardous pollution levels in the region. Nikhil Kamdar, Appointed Actuary at Digit Insurance, emphasised the policy’s simplicity, efficiency, and transparency. He said: “We are proud to launch an innovative parametric insurance solution for vulnerable workers against wage loss caused by construction bans triggered by Delhi NCR’s hazardous levels of air pollution. Parametric insurance is a simple, efficient, and transparent way to address the financial vulnerabilities of workers caused by environmental challenges in the region.”
This policy follows Digit Insurance’s previous introduction of a similar parametric insurance product in 2024, which was designed to protect women labourers in Gujarat from heat-induced work disruptions. Unlike traditional insurance, which necessitates an assessment of actual losses, parametric insurance offers immediate payouts based on predefined thresholds. These thresholds are typically environmental conditions such as weather changes or pollution levels, allowing for quicker financial relief to policyholders without the lengthy claims process associated with conventional insurance models.
The introduction of this AQI-based insurance policy comes at a critical time for Delhi NCR, a region frequently grappling with hazardous air pollution levels that disrupt daily life and economic activities. The policy represents a strategic effort by Go Digit to address the financial insecurities faced by migrant workers, a demographic particularly vulnerable to the economic impacts of environmental hazards. By ensuring that workers receive timely financial support, the policy aims to alleviate some of the economic burdens imposed by unpredictable environmental conditions, thereby promoting financial stability among affected workers.
In the broader context of the insurance industry, Go Digit’s strategy underscores the growing relevance of parametric insurance as a tool to manage the financial risks associated with climate and environment-related events. The policy not only enhances Go Digit’s portfolio of innovative insurance solutions but also sets a precedent for other insurers to develop similar products addressing environmental challenges. As pollution levels in major urban centres like Delhi continue to rise, the demand for such specialised insurance products is likely to increase, potentially driving further innovation in the insurance sector.