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Women's climate shock insurance and livelihoods initiative

In April of this year, our Women's Climate Shock Insurance and Livelihoods Initiative (WCS) went live just in time for India's heat season. The program provides income support directly to women working in the informal sector when there are harmful heat waves. 


The sweltering temperatures of the last few weeks have triggered the insurance and cash assistance providing a lifeline for 50,000 women of the Self Employed Women's Association working in the informal sector across three states in India. 

What is Women’s Climate Shock Insurance? 


As high temperatures continue to shatter daily records, communities worldwide are experiencing the impact of extreme heat, from disrupting their livelihoods and economies to harming their health.  Around the world, women are suffering disproportionate impacts from extreme heat including health effects and lost income. 


WCS is a global initiative starting in India that combines financial protections with other interventions, including an early warning system, to help women prepare for the mounting and devastating impacts of extreme heat. In April 2024, Climate Resilience for All designed and put into operation, with its partner, the Self-Employed Women’s Association (SEWA) and in collaboration with Swiss Re Public Sector Solutions, the Women’s Climate Shock Insurance and Livelihood Initiative (WCS).   


WCS financial protections combine a microinsurance parametric product and cash assistance to supplement lost wages due to extreme heat. Micro-insurance policies pay out automatically at high temperatures when heat passes a pre-set threshold and can help women recover their losses, keep their families safe and fed, and protect their health on the most brutal of hot days.  


Small, direct cash payments, made at lower temperature thresholds, play an essential role in ensuring that even at lower (but still health damaging) high temperatures, women have a supplement for lost income and more decision-making power after a heat shock.  


When that insurance and cash support is combined with other protections such as job-specific heat early warning systems and protective equipment such as tarps to cover roasting crops and cool boxes for meat and produce, women have more opportunities to survive and thrive in extreme heat. 


Why focus on women? 


In most parts of the world, women typically earn less than men. Many work in the informal economy, in precarious jobs that offer few workplace protections and can limit their ability to save to recover from climate shocks, such as heatwaves.  


Outside of their income-earning work, many women also carry a heavy workload of domestic jobs, including looking after children, elderly family members and others in need of care. 


While heatwaves threaten both men and women, women face some particular risks, such as a heightened risk of miscarriage or premature birth when they are pregnant. Many women also report heat-related health issues ranging from rashes and skin infections to burns and dizziness. 


In some cultures, women face restrictions on leaving the house alone, which can limit their access to cooling spaces such as parks. Some are expected to wear dark-colored, heat-absorbing clothing over most of their bodies even in extreme heatwaves. Family and child-care obligations also can limit the ability of women to move to seek safer and cooler conditions. 


Such financial, physical, social, and cultural realities leave women at profound risk from extreme heat - but these women also hold the solutions and have clear ideas of what will help protect them and their families. These insights and lived experiences are being incorporated into planning and design of the Women’s Climate Shock Insurance and Livelihood Initiative to make it as effective as possible. 


Who will have access to heat insurance? 


In India, Climate Resilience for All and SEWA offer the WCS insurance package for $1 to $3 per year to street vendors, waste recyclers, ship breakers, farmers, salt miners and other self-employed, heat-exposed women in Gujarat, Maharashtra and Rajasthan states. 


Such women typically earn $3 to $4 a day, but many work outside with little protection from temperatures that can reach 50° Celsius (122° Fahrenheit) or more in the hottest months. Extreme heat not only carries the risk of heat stroke, miscarriage, and other health impacts, but typically costs women 40 percent to 50 percent of their income on very hot days as products they sell spoil or heat reduces their work hours. 


Heat insurance products are intended to help cushion those financial losses, while job-specific heat early warning systems help women prepare to keep themselves safer on extreme heat days. 


As part of the WCS, Climate Resilience for All is also working with partner, Khwendo Kor, a women-led NGO based in Peshawar, Pakistan, to design tailored financial solutions for heat and flood risks for women and their families. 

















How does heat insurance work? 


With traditional “indemnity” insurance - such as for a home or car - a policyholder who suffers a loss contacts the insurance firm, which sends out a claims adjustor to look at the losses, put a value on them and ultimately issue a payment, often months after the loss. 


Heat insurance - known as “parametric” insurance - operates differently. Working together, communities and insurers determine a temperature threshold at which losses typically occur. Once that is established, policyholders automatically receive a pre-determined payout - typically a few dollars per day - directly into their bank account each time the threshold is passed. 


Without the need to employ claims adjustors, such policies are more affordable, and payments typically happen more quickly, in weeks rather than months - though setting the correct thresholds for payouts can take time and require adjustment. 


Parametric insurance policies have been used in recent decades to counter a range of climate threats, for instance providing payouts to farmers who are presumed to have lost crops when too little or too much rain falls. 


Why is direct cash assistance also needed? 


Heat insurance policies can help women recover from losses brought on by extreme episodes of heat, but insurance is for the worst of events and even lower extremely hot temperatures still have significant effects on women and their daily lives. The acceleration and scope of extreme heat means that both are needed to minimize the impacts of this climate threat. 


Members of India’s Self-Employed Women’s Association who purchase heat insurance policies in 2024 are also eligible for direct cash payments equivalent to a day’s wages when temperatures hit 40° Celsius (104 ° Fahrenheit). 


Record heat in May in SEWA districts triggered both Climate Resilience for All’s heat insurance and direct cash payments, resulting in the first WCS insurance payments directed to approximately 42,242 women, 92% of participants – and 100% of members received a one-time cash payment - so far. The program runs through April 2025. 


What else can protect women? 


Making women more aware of the specific heat risks they might face and giving them adequate warning and actionable guidance when extreme heat is predicted, can help them prepare and save lives. 


Climate Resilience for All is building job-specific heat guidance for informal workers, and better early warning systems focused on specific heat-related health risks. In West Africa, it is working to deliver such guidance through widely used popular social platforms such as WhatsApp. 


In Freetown, Sierra Leone, CRA work is focused on the city’s heat action plan, the first in Africa, and with women in markets across the city to bring cooling solutions like shade structures, solar lights and fans. 


Climate Resilience for All also is working to expand the practice of giving heatwaves names - as now happens with cyclones and hurricanes - to boost awareness of risks and actions to reduce them. A trial in Seville, Spain, in 2021-2022 showed naming a heatwave there was effective in getting people to prepare more thoroughly, alert friends and family, and trust government advice in surviving extreme heat. 

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