ABSTRACT​

As climate change drives increasing deadly and costly global and local heat extremes, efforts to limit their impact on the health and incomes of the most vulnerable are increasingly needed. Women workers are among those disproportionately affected by heat. Many work in the informal economy where they have limited protections and lower incomes. Demands on their time in terms of household and family responsibilities—as well as cultural restrictions—can add to their heat exposure and limit their ability to reduce it. Urban women can be at particular risk because of the “heat island effect” that makes cities significantly hotter than surrounding areas. Parametric heat insurance policies, now in place in India, show promise to lower risks and support women financially during extreme heat waves. They also provide a means to move climate aid to frontline communities most in need of it, while building women’s own financial skills to manage climate risks. Insurance policies are being combined with other heat adaptations—such as accessible cooling spaces and early warning systems—to remain effective as heat extremes grow. 

 

Hotter and deadlier

As the climate crisis intensifies, the impacts of extreme heat on workers, particularly women in the informal economy, are becoming impossible to ignore. These women, many of whom juggle multiple responsibilities—both at work and home—are disproportionately vulnerable to the escalating risks posed by rising temperatures. As heat waves worsen, these risks grow, impacting both health and income, especially for those lacking access to cooling or basic workplace protections.

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Increasing record-setting heat, driven by climate change, is now the world’s biggest killer among extreme weather disasters, with the World Meteorological Organization (2023) estimating that heat claimed close to half a million lives globally on average each year between 2000 and 2019.

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Besides its often-deadly health impacts, very hot conditions also devour an ever-bigger share of incomes—especially among those least able to afford the losses—and reduce productivity, threatening to become a major drag on economies at all scales as increased burning of coal, oil, and gas drives temperatures even higher (Callahan & Mankin, 2022; Picchio & van Ours, 2024).

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The heat is especially dangerous and costly for those workers who spend long hours labouring outside or in buildings without adequate cooling, from delivery and construction workers to factory and warehouse staff, firefighters and police, traffic and parking wardens and anyone who must travel significant distances to work in hot conditions (Ioannou et al., 2022).

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The problem is even more acute for those working in cities, where concrete buildings, roads, and other structures absorb heat during the day and release it back at night, leading to a “heat island effect” that can make cities several degrees hotter than surrounding areas and slower to cool at night, particularly if there are few cooling urban green spaces (Kotharkar et al., 2018).

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Women workers are disproportionately affected (Allen, 2022). Around the world, women typically earn less than men and hundreds of millions labour in the informal economy, in precarious jobs that offer few or no workplace protections and can limit their ability to save sufficiently to deal with unexpected crises, which are mounting with climate change.

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Before and after work, many women also carry a heavy workload of domestic jobs, including cooking, obtaining increasingly scarce water, and looking after children, older family members, and others in need of care (P. Singh & Pattanaik, 2020). Some face cultural restrictions on removing heat-exacerbating clothing or on leaving the house alone to seek out cooling spaces, which can significantly raise the threats to their health.

 

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But innovation from around the world designed to reduce the risks of urban heat has surged in recent years. Cities have painted roofs white, or covered them in vegetation, to reflect more heat and cool what is inside (Wang et al., 2022). Shady urban green areas and cooling water access points have expanded. (Wong et al., 2021) Formal cooling centres have opened, heat action plans and early warning systems have been established, and hot cities are beginning to rethink architectural designs and materials to try to make buildings naturally cooler in summer (Bedi et al., 2022).

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Heat insurance also has a role to play, particularly in protecting some of those least equipped to deal with the growing risks.

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Heat insurance: A promising solution

The parametric heat insurance programme in Ahmedabad, India, spearheaded by the non-profit Climate Resilience for All (CRA) in partnership with the Self-Employed Women’s Association (SEWA) and supported technically by Swiss Re, is a pioneering initiative addressing heat-related risks for women in the informal economy. This programme provided timely payouts to 50,000 women working in diverse sectors, such as salt-pan mining, street vending, and construction, enabling them to cover critical expenses like medical bills, food, and school fees during the hot season. A key advantage of parametric insurance is its speed of payouts, which contrasts sharply with traditional insurance models—such as home or car insurance—that often take months to process claims. Launched in April 2023, the pilot programme in Ahmedabad serves as a foundation for scaling the initiative to SEWA’s broader membership of 2.5 million women across 18 Indian states, incorporating lessons learned to enhance its effectiveness and reach.

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Unlike traditional insurance, which requires assessing individual losses through claims adjusters, parametric insurance uses pre-determined thresholds—such as temperature extremes—to trigger automatic payouts. Once the temperature crosses a specific threshold, beneficiaries receive funds directly into their accounts without having to prove losses. This system offers several advantages, particularly for informal workers who may lack the time, resources, or access to engage with complex claims processes.

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In Ahmedabad, these small, affordable policies—costing approximately USD 5.00 per year—offered immediate relief during a record-breaking heat season. Women who could no longer work due to the heat were able to use their payouts to buy food, pay for medical expenses, and support their families while recovering from heat-related ailments.

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However, while heat insurance offers crucial short-term relief, it is only part of the solution. As global temperatures continue to rise, more frequent and intense heat events could strain the financial viability of such programs. Insurance, in isolation, cannot fully address the underlying issues—namely, the need for improved infrastructure, workplace protections, effective early warnings, and accessible cooling measures.

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What heat insurance does provide is a way to move cash swiftly and directly into the hands of those who need it most to deal with growing climate impacts, a challenge when funding for adaptation to climate change lags well behind funding for clean energy and far too little of even limited adaptation funding actually reaches the frontlines of need.

That suggests it may be a cost-effective way for cities with limited resources and facing worsening heat waves—in places from Africa to Latin America and broader parts of Asia—to reduce the costly financial and health effects of extreme heat on their most exposed workers.

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Cities looking to drive effective action against extreme heat threats should start by undertaking a process to build an inclusive, accessible, and actionable heat action plan. Components of the plan include raising awareness about the disproportionate impacts of extreme heat on some residents and then asking those most at risk—from those living in informal settlements to older people, migrants, women, and the very poor—what they think might best help them get through and beyond heat events with their health and income protected. Housing authorities and health and human services departments are well-placed to help judge who might be most at risk.

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Finding trusted community partners with strong ties within the most at-risk communities, such as religious leaders or trusted community health leaders, is also key to ensuring smart interventions are both created and delivered effectively. Cities can consider heat insurance; however, such insurance needs to be combined with other heat risk–reducing interventions and policies.

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The critical role of cities in protecting vulnerable workers

Cities, as centres of economic activity and dense populations, are at the forefront of the climate change battle, particularly when it comes to the impacts of extreme heat. Urban areas are disproportionately affected by heat due to the urban heat island effect, which is especially dangerous for workers who spend long hours outdoors or in poorly ventilated buildings without adequate cooling.

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Urban governments play a pivotal role in developing and implementing adaptation measures to protect their most vulnerable populations, including women in the informal economy (Parsaee et al., 2019). City-level heat action plans are essential tools for addressing the risks posed by extreme heat (C. Singh et al., 2024). These plans should include the creation of public cooling places, the expansion of green spaces, and the promotion of measures such as cool roof and cool pavement technologies to reduce ambient temperatures in densely built-up areas (Gabbe et al., 2024). Many cities around the world have already begun implementing heat action plans, offering valuable lessons for other urban areas facing similar challenges (Ghosh, 2024).

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However, to be truly effective, urban adaptation efforts must prioritize the needs of the most vulnerable populations. Women in the informal economy often lack access to safe working environments, sanitation, and cooling facilities (Venugopal et al., 2016). This makes it critical for cities to not only build infrastructure but also ensure that it is inclusive and accessible. For example, public cooling spaces should be located near markets and other hubs where informal workers congregate. These spaces must also be designed to accommodate the needs of women, such as providing secure environments, access to clean water, and sanitation facilities.

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Cities can also play a key role in scaling up innovative financial tools like parametric heat insurance. By integrating insurance schemes into municipal adaptation strategies, cities can provide a direct mechanism to transfer funds to vulnerable workers when heat waves strike. Partnerships with local organizations, trade unions, and financial institutions are critical to expanding these initiatives and ensuring they reach the people who need them most.

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Furthermore, public awareness campaigns should be part of every city’s heat adaptation plan. Many vulnerable workers may not be fully aware of the risks of extreme heat or the services available to them. Cities can use media, community outreach, and trusted local organizations to educate at-risk populations about how to stay safe during heat waves and where to find critical resources.

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By adopting a proactive approach that combines infrastructure improvements, financial tools like heat insurance, and effective community engagement, cities can play a transformative role in safeguarding their populations from the worsening impacts of climate change. In doing so, they can help protect the health and livelihoods of millions of vulnerable workers—particularly women in the informal economy—who are on the front lines of the climate crisis.

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The role of comprehensive adaptation measures

To effectively mitigate the impacts of extreme heat on vulnerable workers, cities must implement a range of adaptation measures. These include creating safe, accessible, and affordable cooling spaces, improving urban planning to reduce heat absorption, and ensuring access to clean water and sanitation facilities near work sites. For example, access to shaded rest areas and toilets is essential to prevent dehydration and heat-related illnesses.

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Additionally, there is a critical need for early warning systems and heat action plans that prioritize the most at-risk populations. Governments and employers must work alongside community organizations to ensure that these interventions are both practical and culturally appropriate. For example, some women may face social barriers to using cooling spaces or removing heat-trapping clothing. Addressing these challenges requires engaging with communities to co-create solutions that are both effective and acceptable.

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The urgent need for climate adaptation funding

Despite the growing evidence of extreme heat’s impact on health and livelihoods, funding for climate adaptation remains woefully inadequate. Only a tiny fraction of global climate finance reaches the frontline communities most affected by climate change (Canales & Savvidou, 2023). Expanding initiatives like parametric heat insurance and other protective measures will require investment from both governments and the private sector.

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In the case of the CRA-led heat insurance program in India, the success of the pilot phase underscores the potential for scaling such initiatives to other heat-prone regions. Cities across Africa, Latin America, and Southeast Asia face similar challenges, with large populations of informal workers exposed to extreme heat. Urban governments in these regions could replicate the CRA-India model by partnering with local labour unions, community organizations, and insurers to offer affordable, accessible heat insurance policies. Such partnerships can help ensure that the benefits of insurance reach those who need it most, especially women and other marginalized groups.

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To address some of the potential challenges associated with heat insurance in a rapidly warming climate, insurers and policymakers will need to continuously adjust thresholds and refine risk models to ensure that the system remains viable. Additionally, cities may need to consider subsidizing premiums or offering public–private partnerships to make policies affordable for the poorest workers.

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Cities can also use heat insurance as a lever for broader urban resilience planning. For example, local governments could incorporate insurance into their heat action plans, ensuring that it complements other adaptation measures such as creating more cooling centres, increasing green spaces, and improving heat early warning and public health systems. By aligning insurance with municipal adaptation goals, cities can create a holistic framework for addressing the effects of extreme heat.

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Conclusion: Toward a resilient future

For millions of women working in informal economies worldwide, the future holds even hotter days. Climate change is already eroding their health and income, and the worst is yet to come. To help these workers protect themselves, we need both short-term financial relief and an approach that invests in long-term interventions and strategies. By taking action now—through innovative financial tools, improved infrastructure, and targeted adaptation strategies, all informed and shaped by women and vulnerable communities—we can help alleviate the disproportionate burden and create a more equitable and sustainable future.

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Peer review

This article has been peer reviewed.

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