India's government has begun early-stage talks with local insurers about designing a nationwide climate-linked insurance programme aimed at simplifying the payout process after extreme weather events such as heatwaves and floods.

The scheme would adopt a parametric insurance model, where policyholders receive a pre-determined payout when specific weather thresholds such as rainfall, temperature or windspeed are breached.

Parametric model under consideration

Should the discussions bear fruit, India - among the nations most prone to extreme weather events - could become one of the first major economies to roll out such a programme.

The move would also help the government, which now uses funds earmarked for disasters to help states with adverse climate events, rein in costs as insurers wo

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