The Daily Brief India wants to insure against climate change
Oct 8, 2025
India explores innovative funding for disaster recovery through parametric insurance, offering faster payouts and broader coverage tailored for climate risks. Discover the challenges traditional insurers face and the advantages of this new model. Additionally, the unlisted share market sees a surge of retail investors, impacting pricing and exposing risks amid regulatory scrutiny. Learn how structural changes have altered this landscape and why investors remain drawn to potential pre-IPO gains despite the dangers involved.
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Public Funds Are First Responder
- India covers most disaster costs through state and central relief funds rather than insurance.
- These government payouts focus on immediate relief, not full compensation for property or income losses.
Insurance Markets Fail For Climate Risk
- Traditional insurers struggle to price and sell affordable catastrophe cover for low-income households.
- This leaves the state as the default compensator, creating uncertain and delayed payouts.
Parametric Payouts Are Trigger-Based
- Parametric insurance pays based on a predefined trigger like rainfall or wind speed, not measured losses.
- Payouts are automatic once data confirms the trigger, eliminating lengthy claims processes.