Go Digit General Insurance Limited (Digit Insurance) has announced the settlement of one of India’s first moisture index-based parametric insurance claims to farmers in Tonk district of Rajasthan, after excess moisture levels crossed predefined threshold limits.
The payout was made to farmers across more than 30 villages in Tonk after the Water Balance Index-based parametric cover was triggered due to excessive moisture conditions. Excess soil moisture leads to waterlogging, increasing the risk of crop damage and rot during the rabi season, adversely impacting yields and farm incomes. The claim is expected to benefit around 500 farmers, offering financial support to vulnerable agricultural households affected by climate-related disruptions.
Digit Insurance had partnered with Howden Insurance India to provide Water Balance Index-based parametric insurance solutions covering both excess moisture and drought risks. The programme extended coverage to over 6,000 farmers across parts of Rajasthan and Uttar Pradesh, including Tonk, Varanasi, Gorakhpur and Jaunpur, spanning close to 2,200 acres of farmland.
With climate-induced risks intensifying, farmers are increasingly exposed to prolonged dry spells, sudden heavy rainfall and soil moisture imbalance, leading to crop failures, root damage and financial stress. Moisture index-based parametric insurance is designed to offer an objective, transparent and swift claims process, helping farming households cope more effectively with weather uncertainty.
Adarsh Agarwal, Appointed Actuary, Digit Insurance, said the company’s focus is on developing data-driven insurance products that directly address real-world risks faced by customers. He added that parametric insurance has significant potential to protect vulnerable segments against climate-related risks, and that Water Balance Index-based solutions are intended to provide timely financial relief when farmers need it most.
Mohammad Faizan Huq, Head of Climate Risk and Agriculture, Howden India, said climate volatility is increasing the need for insurance solutions that deliver speed, transparency and confidence. He noted that while parametric insurance is still evolving in India, collaborative efforts with insurers such as Digit Insurance can help expand its reach and impact across vulnerable communities.
The Water Balance Index, developed by Global Parametrics, is used as a proxy to assess excess moisture and drought conditions by measuring the difference between rainfall and potential evapotranspiration. The index relies on ERA5-Land climate data from the European Centre for Medium-Range Weather Forecasts and is designed to capture soil moisture stress that directly affects smallholder farmers. Under the parametric structure, payouts are triggered when predefined thresholds are met, enabling transparent and timely settlement based on independently verifiable data.
Depending on the severity of excess moisture, payouts range between 10 and 100 per cent of the insured limit. This settlement marks the third instance of Digit Insurance delivering a parametric payout. The company had earlier made heat index-based payouts to migrant workers in Noida and farmers in Gujarat, and also piloted an air quality index-based parametric insurance product for daily wage workers in Delhi-NCR.
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