Insurance firms unveil heatstroke policies amid hotter summers

Japanese insurance firms are looking to cash in on a nationwide heat wave by rolling out a series of new offerings related to heatstroke.

Several companies have unveiled policies to cover expenses linked to hospitalizations, intravenous drips and other treatments for the condition.

But since it is difficult to accurately predict how many people will get heatstroke, some are raising concerns that a sudden surge of patients could deliver a stiff blow to their earnings.

Temperatures have reached record highs across Japan since late June. And as the mercury rises and people continue to don surgical masks due to the ongoing COVID-19 health crisis, heatstroke cases are expected to rise over the summer months.

Aiaru Small Amount & Short Term Insurance Co., affiliated with Sumitomo Life Insurance Co., released a special policy for heatstroke in April, billed as the “first of its kind” in the insurance business.

Policyholders can decide their insurance periods on their own with prices starting from 100 yen (72 cents) per day, while a basic monthly package goes for 220 yen a month.

Conventional insurance products are common for hospitalization due to heat stroke. But under the new offering, policyholders are also eligible for payouts if they receive intravenous drips as an outpatient. Depending on how much they invest, the benefit ranges from 5,000 yen to 30,000 yen.

Applications for the service surged when temperatures quickly rose in late June. More than 6,000 contracts were signed over three consecutive days since June 29, thanks in part to the smartphone payment service PayPay, which has made it easy to quickly finish the procedures.

“We believe we are successfully responding to the need among people who want to prepare appropriately for the risk of heatstroke,” said a representative of Sumitomo Life Insurance.

Sompo Japan Insurance Inc. started accepting orders in July for a special contract under its accident insurance, where benefits are provided to people who die, are hospitalized or go to a medical center because of heatstroke.

Mitsui Sumitomo Insurance Co. introduced a heatstroke special contract for individual customers of its accident insurance policies last year. More than half of new purchasers of an accident insurance policy for 70 or older have applied for the special contract.

Aioi Nissay Dowa Insurance Co. added a heatstroke provision to its accident insurance package for individuals, and Tokio Marine & Nichido Fire Insurance Co. made a similar offering accessible under its accident insurance for corporations and organizations.

Insurance providers have been beefing up their heatstroke insurance lines amid the novel coronavirus crisis and the rapid increase in patients stemming from rising temperatures.

People are still wearing masks to protect themselves and others from the spread of the coronavirus, even while outdoors, despite the health ministry warning that wearing masks in humid, high-temperature environments will increase their risk of heatstroke.

Data from the Fire and Disaster Management Agency shows some 40,000 to 50,000 people were sent to hospitals for heatstroke between June and September from 2015 to 2017.

The figure topped 90,000 in 2018 in part because of far higher temperatures recorded during that summer. Over 60,000 patients were reported in 2019 and 2020.

The Japan Meteorological Agency forecasts that temperatures will be higher than usual this summer through September. That may result in more people being affected by the heat.

If the number of patients rises more dramatically than predicted, though, insurance firms could see their profit margins take a nosedive. An insider of a major insurance provider acknowledged it is “difficult to foresee risks since weather conditions and other factors can affect the spread of heatstroke.”

Insurance companies were previously forced to stop selling or raise fees for their new coronavirus policies after the number of policyholders and patients shot up far more dramatically than the industry had predicted.

Asked about the likelihood of the same happening with heatstroke insurance, Sumitomo Life Insurance said it is not worried about that and does not expect that a rise in patients would result in suspending sales.

“Although it was unclear how the coronavirus will spread, the number of heatstroke patients can be predicted to some extent based on temperature changes and other types of annual data,” said a Sumitomo Life Insurance representative. “Heatstroke insurance is not as risky as coronavirus (policies).”

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