Bajaj Allianz Introduces 'ClimateSafe' Parametric Insurance to Address Climate-Related Risks.
Banking & Finance
On April 29, 2025, Pune (Maharashtra)-based Bajaj Allianz General Insurance Company Limited, a joint venture between Bajaj Finserv Limited (India) and Allianz SE (Germany), launched ‘ClimateSafe’, India’s first parametric climate risk insurance product.
- The innovative product aims to provide swift financial assistance to individuals impacted by climate change-induced weather conditions, including extreme heat, cold waves, and excessive rainfall.
- Under this policy, a financial payout of up to Rs 6,000 per worker will be disbursed if the daily Air Quality Index (AQI) exceeds 400 for more than two defined strikes.
- A strike is defined as a period when the AQI remains above 400 for at least three out of the previous five days.
Main Point :- (i) ClimateSafe operates on a parametric insurance model, where automatic payouts are triggered once specific weather thresholds—such as temperature or rainfall levels—are breached, as recorded by the India Meteorological Department (IMD). The process requires no manual claims, and settlements are completed within 7 days, ensuring quick financial relief without customer intervention.
(ii) The product is designed to compensate for income losses faced by daily wage and gig economy workers, while also covering additional expenses such as increased electricity bills or commuting costs. It also offers protection against supply chain disruptions, event cancellations, and damage to household items due to climate-induced events like floods or heatwaves.
(iii) Customers can personalize their insurance by selecting the location of risk, the risk period (ranging from 1 to 30 days), sum insured, and specific weather triggers like excessive rainfall or extreme temperatures. Premium pricing is dynamic, calculated in real-time based on climate data, making it responsive and adaptable to changing environmental conditions.
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