AXA launches heatwave parametric insurance in Hong Kong

Global insurance group AXA, through its Hong Kong and Macau branch, has announced the launch of a parametric insurance product tailored to respond to heatwave situations that can create heat stress for outdoor workers.

The heatwave parametric insurance has been designed to provide enhanced protection for outdoor practitioners that work outdoor in the summer.

The insurer explains that, over the past three decades, the annual mean temperature in Hong Kong has exhibited a statistically increase of 0.30°C per decade from 1994 to 2023 based on climatological data.

As a result, there can be heightened risks for those working outdoors, especially in the construction, property management, public utility and transportation sectors, hence the heatwave parametric insurance is designed to provide flexible and convenient benefits for heat stress prevention and protecting affected practitioners, AXA explained.

It’s a simple product design, with a relatively small HKD 19.9 premium per person.

The heatwave parametric insurance can be triggered when the temperature exceeds 36.0°C for three consecutive days during the period of August to October.

Payouts will be made in the form of either HKD100 per insured individual, or an “anti-heatwave kit” of an equivalent value.

AXA will monitor temperatures and notify customers when the parametric trigger is breached, so there is no need to submit a claim or prove any damage or loss.

Emily Li, Chief Employee Benefits & Wellness Officer, AXA Hong Kong and Macau, explained, “Global warming is driving extreme climate conditions, with Hong Kong’s hot weather continuing to intensify and posing health risks to the public. Corporations play a critical role in addressing these climatic challenges by ensuring an optimal employee benefits strategy to support and protect employees in this rapidly evolving world.

“Our new product is notable as the first parametric insurance in the city tailored to mitigate the impacts of climate change on employees. It serves as a testament to our expertise in protection and our comprehensive insights into climate dynamics. This initiative exemplifies our commitment to integrating sustainability into our business propositions, and providing enhanced protection for a workforce facing increased risks due to changing environmental conditions.”

AXA said that the straightforward nature of the parametric insurance, as well as its accessibility, will make it a practical solution for companies looking to strengthen their workforce protection.