New India Assurance to Launch Climate-focused Parametric Insurance

New India Assurance is set to introduce a parametric insurance product this month to shield consumers from climate risks. Unlike conventional insurance, claim settlements hinge on pre-established parameters for quick payouts. The product targets climate-induced events affecting livelihoods, bolstered by public data verification.

New India Assurance, a state-owned insurance giant, is gearing up to launch a parametric insurance product later this month. This innovative policy aims to provide a financial safety net for both retail and business customers faced with climate risks, according to chairman and managing director Girija Subramanian. Parametric insurance differs from traditional policies by offering quicker claim settlements based on predefined climate-related parameters.

Chairman Subramanian explained that once specific climate thresholds are breached, claims are paid out promptly. These thresholds rely on public data, including official declarations from the Indian Meteorological Department. This new product, already registered with regulator IRDAI, focuses on mitigating climate-related uncertainties that impact daily livelihoods and employment generation.

The announcement comes as New India Assurance reported a slight dip in its net profit for the fourth quarter, marking a 2 percent decrease from the previous year. Despite this financial performance, the company's total income saw an uptick, alongside a significant drop in annual profits, underlining the firm's strategic pivot toward innovative insurance solutions amidst challenging market conditions.

(With inputs from agencies.)