Mohammad Faizan Huq says climate risk insurance is essential, not optional, as India grapples with intense heat waves triggered by rising climate volatility, with vulnerable workers unable to withstand repeated income shocks bearing the brunt.
Huq is vice president and head of reinsurance for the agriculture, parametric and accident and health (A&H) divisions at broker Howden India. In a recent interview with Reinsurance News, he emphasized that severe weather is “no longer just a climate issue, it’s an economic issue.”
In places like India, where large numbers of gig and informal workers rely on physical presence and outdoor activities for their livelihoods, Hook stressed that the need for climate risk insurance is critical.
“Climate risk insurance is moving from optional to required. As climate volatility intensifies, vulnerable workers cannot afford repeated income shocks on their own. To scale adoption, products must be simple, affordable and trustworthy, with fast payouts and clear triggers. Distribution through employers, platforms, governments and financial institutions will be key.
“Ultimately, climate insurance should be placed within a broader resilience framework that links insurance, adaptation and social protection,” Hook said.
As heatwaves become more frequent, longer and more intense, gig and informal workers are working fewer hours, lowering productivity levels and increasing health risks.
“Losing even a few hours a day of work due to an ongoing heat wave can severely reduce household incomes,” Hook said. “For households already operating on razor-thin margins, such volatility can push them closer to debt and instability.”
He went on to cite data from the Council on Energy, Environment and Water, a non-profit policy research company in India, showing that nearly 57% of India, covering about 76% of the population, now faces high to very high heat risks.
“This is particularly important for delivery workers, construction workers, street vendors and other outdoor workers, whose income is directly related to daily physical activity,” Hook said.
Some of the most common health risks workers face in extreme heat conditions include dehydration, exhaustion and heat stress, while the main financial risk is disruption to income.
Hook explains: “Most informal workers lack savings, paid leave or social security, so missing work immediately translates into financial stress. Preparations remain limited. Awareness has increased, but access to a real safety net, income protection, health insurance or employer support remains rare or lacking.
“The scale of the challenge is clear during the 2024 heat wave season, with more than 40,000 suspected cases of heatstroke reported across multiple Indian states, and more than 100 heat-related deaths. Such events highlight how climate shocks can quickly turn into livelihood shocks for vulnerable workers.”
For Huq, the problem is that traditional insurance does not adequately cover gig and informal workers, especially in the context of climate-related risks such as heat waves, because traditional insurance is designed around formal employment, documented income and discrete loss events, and gig and informal work simply do not fit into this structure.
“Hot weather affects revenue over time through shorter workdays, reduced output and recurring health issues rather than a single insurable incident. This makes traditional claims-based insurance inefficient and difficult to obtain for both insurers and workers,” Huq said.
With this in mind, we asked Huq whether innovative solutions such as parametric insurance or microinsurance can actually bridge this protection gap.
“Yes, they can, especially for climate risks like heat. Parametric insurance is based on predefined triggers, such as sustained temperature thresholds, rather than assessed losses. This allows for fast, automated payments without the need for complex claims processes. Such speed is critical when workers need immediate mobility. India’s strong digital infrastructure, weather data and platform-based workforce make these solutions increasingly feasible, especially when combined with wider adaptation measures,” he said.
Hook noted that as the frequency and intensity of heat waves increase in India, it is important that reinsurers/insurers start to recognize that heat waves are structurally inadequately modeled.
“Unlike floods or cyclones, heat does not destroy assets overnight; it gradually weakens resilience. In India, where a large portion of the workforce is exposed to outdoor heat, the cumulative impact on health, productivity and economic stability is enormous. Heat is now viewed not just as a weather event but as a systemic stressor with long-term economic impacts.
“From a risk perspective, the concern is not just mortality or medical costs, but the knock-on effects on labor productivity, supply chains and economic output. The International Labor Organization has previously estimated that heat stress could lead to the loss of more than 34 million full-time jobs in India by 2030. For reinsurers, this highlights how heat risks are increasingly interconnected with economic resilience and social stability, rather than being viewed as independent weather risks,” Huq said.
Finally, Hook offers some thoughts on the role employers, platforms, and policymakers can play in building a safety net for vulnerable workers against climate disruption.
“This requires coordinated action. Employers and platforms can provide flexible working arrangements, hydration support, heat advisory and essential climate-related protections. Policymakers have a key role to play through stronger heat action plans, urban cooling measures and public-private partnerships in climate risk financing. Long-term resilience will depend on combining direct worker protections with structural solutions in urban planning and infrastructure.
“India has scaled up its Heat Action Plan in 23 heat-prone states in partnership with NDMA and IMD, covering measures such as early warning systems, public advisories, cooling centers and emergency response protocols, especially in tier-II and tier-III cities where informal labor exposure remains high.”
