There has been an analysis indicating the need for insurance products for 'climate vulnerable groups' such as outdoor workers whose work is halted during heat waves and small business owners experiencing decreased sales.
According to the Korea Insurance Research Institute on the 20th, researchers Kwon Soon-il and Han Jin-hyun noted in their report 'Heatwave Disasters and Climate Vulnerable Groups' that 'disasters from extreme weather phenomena like heatwaves increase not only direct damages such as bodily injuries and deaths of livestock and aquatic products but also indirect losses such as loss of earned income due to the suspension of outdoor work.'
They also said, 'Because the damages caused by climate change may be difficult to verify with direct causality, the introduction of index-based insurance should be considered.'
Index-based insurance refers to products that provide agreed insurance payouts when a predefined index meets specific conditions, rather than calculating and compensating actual damages or losses on a case-by-case basis.
They pointed out, 'In the case of indirect losses such as loss of earned income or increased expenses, the absence of relevant insurance products is due to limitations in determining the causal relationship between the occurrence of heatwaves and the losses.' They noted that 'to protect climate-vulnerable groups, there is a pressing need for policy support that includes the introduction of insurance products.'
Delivery platform workers, small business owners experiencing decreased sales during heatwaves, and elderly individuals living alone were mentioned as part of the climate-vulnerable group. According to the report, the Ministry of Environment is developing index-based climate insurance with a target introduction in 2026, which would compensate outdoor workers at construction sites for lost income due to abnormal weather conditions.
The researchers noted that 'Japan sells small short-term insurance products that can be easily subscribed to via mobile apps during outdoor activities, and India is developing and selling index-based insurance products that guarantee loss of earned income due to heatwaves.'