India’s central government has initiated early-stage consultations with domestic insurers to design a nationwide climate-linked insurance programme aimed at protecting vulnerable communities and assets from rising climate risks.
Key Highlights:
- Programme to cover floods, droughts, cyclones, and heatwaves under parametric and indemnity-based models
- Initial focus on agriculture, MSMEs, and low-income households in high-risk zones
- Discussions involve IRDAI, state governments, and leading insurers like LIC, SBI General, and ICICI Lombard
- Data integration from IMD and ISRO to support real-time risk assessment and payout triggers
- Pilot schemes may launch in Odisha, Maharashtra, and Tamil Nadu by mid-2026
- Funding options include blended finance, sovereign guarantees, and multilateral support
- Programme aligns with India’s climate adaptation roadmap and disaster resilience goals
Strategic Impact:
- Aims to reduce fiscal burden of post-disaster relief
- Encourages climate-smart planning and insurance penetration
Sources: Reuters India Exclusive, IRDAI Climate Desk, Economic Times Policy Bureau, Ministry of Finance Brief 2025