India expands parametric insurance in climate-hit sectors

India’s parametric market is growing at a faster pace of 11.3% annually through 2028.

As India faces more frequent floods, heatwaves, and solar shortfalls, parametric insurance is starting to gain traction in sectors like agriculture, renewables, and informal labour, according to Policybazaar for Business. 

Globally, the parametric market was worth $15.9b in 2023 and is projected to reach $34.6b by 2032. 

India’s market is growing at a faster pace of 11.3% annually through 2028. Whilst still early, parametric insurance is becoming a quiet tool in India’s climate risk strategy.

Adoption remains low but is growing. Agriculture accounts for 50% of uptake, mainly for drought and excess rain.

Renewables make up 40%, while the remaining 10% includes coverage for heatstroke, logistics, and flight delays. 

Recent trigger events in Rajasthan, Gujarat, Himachal Pradesh, and coastal Karnataka have prompted real-world payouts.

Newer products are shorter-term, simpler, and supported by reinsurers like Swiss Re and Munich Re. AI is also improving trigger design and pricing. Seasonality is emerging, with heat-related covers in May–June, rain in July–September, and solar or wind triggers from October to February.