Climate-risk insurance gains traction as heat waves intensify

Korea’s leading non-life insurers are teaming up with local administrations to build out the country’s fledgling market for climate-risk insurance, as more frequent heat waves drive up economic losses and protection gaps, according to industry officials Tuesday.

The push comes as prolonged heat waves and tropical nights have become a familiar feature of Korean summers, disrupting outdoor work across construction sites and farms.

Beginning in August, Jeju Island will introduce a program for daily construction laborers that partially compensates them for lost wages when extreme temperatures suspend outdoor work.

Five companies — Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, Hanwha General Insurance, NH NongHyup Property & Casualty Insurance and DB Insurance — are participating in the program.

The initiative is among the few in Korea to adopt parametric insurance, in which payouts are automatically triggered once predefined conditions are met.

If the Korea Meteorological Administration issues a heat wave warning before 1 p.m. and construction sites halt operations ...