Discussion of Index-Based Climate Insurance to Offset Income Reduced by Heatwaves

As climate change such as heat waves and cold waves shakes the incomes and sales of day laborers, delivery workers, and small business owners, discussions are spreading about introducing an 'indexbased climate insurance' that can help offset this. According to Kyunghyang Shinmun, Jeju Province has been operating constructionsite climate insurance since last April, and when work is suspended at public construction sites due to weather, it compensates part of the income loss of day laborers. In the private sector as well, weatherdamage insurance products have been launched that cover losses from the closure of traditional markets. Indexbased insurance is a method that pays out insurance benefits when weather indicators such as rainfall or temperature reach a certain threshold, regardless of whether actual losses occurred. It is being evaluated as a way to address the limitation of existing indemnity insurance, which does not sufficiently cover indirect losses such as work stoppages or sales declines caused by heat waves. The Insurance Research Institute said that, as the climate crisis increases the number of hot days and torrential downpours, support at the level of a social safety net is needed for construction workers, delivery platform workers, and small business owners vulnerable to heat waves. However, there are also points out that expansion will only be possible if accurate weather data is secured, sophisticated product design is developed, and local government support is provided together.