Japan’s heatstroke insurance boom carries a warning for the rest of us- Newshubweek

Japan’s heatstroke insurance boom carries a warning for the rest of us
Written by Arindam

Over 200 years ago, Japan’s finest poets would gripe about the unbearable heat of midsummer. Issa Kobayashi, in particular, could haiku perfectly on the pathetic gratitude he felt for three cooling raindrops.

But in an era of record temperatures, nationwide alerts to remain indoors and surging hospitalisations, lyrical complaint is no longer quite enough. Japan is sweltering as never before, people are dying and insurers are innovating.

Few countries have been spared temperature extremes in recent years, and many studies predict the frequency of such events will only rise worldwide. But Japan, as an advanced economy with an ever more economically dented middle class, a deepening labour shortage and the world’s most aged population, has entered a distinctive version of the heat crisis with warnings that should echo globally. The recent Japanese invention of heatstroke insurance, while eye-catching as a piece of commercial innovation, tells an unsettling story about those it will cover.

The incentives for seeking heatstroke cover are evidenced in the statistics generated by 2022. This year’s rainy season was the shortest since comparable records began in 1951. In June, 37 per cent of the Japanese Meteorological Agency’s observation stations reported record highs for that month. Also in June, a record 15,657 people were hospitalised with heatstroke or heat exhaustion, doubling the previous high set just over a decade ago. Since July 1, households and businesses have lived under an occasionally white-knuckle energy conservation drive to avert blackouts.

The bigger picture is no less alarming. A government report in 2018 identified areas where climate change would affect Japan with particular ferocity. Increased “massive damage” to manufacturing, commerce and construction all lie in the not too distant future, it said, as does a long-term surge in heat-related illness among a population becoming steadily more vulnerable as its average age rises.

Into this scene has swept heatstroke insurance — a product created by an industry with a sometimes overlooked talent for spivvy innovation and a sharpshooter’s eye for Japan’s new vulnerabilities.

Five of Japan’s largest insurance groups have, since April, begun offering some form of heatstroke cover — extensions to traditional health or accident insurance that start at roughly Y220 ($1.65) per month and pay out in the event of heat-related death, hospitalisation or outpatient treatments such as intravenous drips. Providers include Sumitomo Life, Mitsui Sumitomo Insurance and Sompo Holdings — companies that described explosive uptake of the policies as the temperature has soared.

They know their market and its fears well. Prominent among insurance adopters have been parents buying policies ahead of school sports days and other events with a high historical incidence of children keeling over.

Overwhelmingly though, say the companies, the product has been bought by (or for) the over-65s — a cohort that now represents 29.1 per cent of the Japanese population. That ratio alone portends the scale of the problem Japan faces as summers get hotter and its inhabitants become ever more vulnerable.

But those demographics alone may not explain the velocity of heatstroke insurance uptake: surely the over-65s can sequester themselves under the air conditioning installed in 92 per cent of Japanese homes (with at least two family members) and avoid the risk of heatstroke altogether? The problem — and this is where Japan’s economic lessons start to resonate most strongly beyond its borders — is that for a great many that is not the case because more than 9mn “retirees” are still working. Often outdoors, and often in uniform.

For most of Japan’s 1970s and ’80s growth period, more than 90 per cent of Japanese considered themselves middle class. The most recent Cabinet Office survey still put the figure at 89.1 per cent. The difficult thing is that people’s sense of their middle-class identity is not merely a function of chattels, but of expectations. High among them is the idea that a working life ending at roughly 65 may be followed by a reasonably comfortable retirement. But this is no longer the case in Japan. In 2011, 36 per cent of 65 to 69-year-olds and 23 per cent of 70 to 74-year-olds were still working, many of them probably fearing that their pensions were insufficient guarantees of a decent life. Last year, the proportion was 50 per cent and 32 per cent respectively.

These are the people who know — or whose nervous children know — they are at heatstroke risk, even as they tell themselves they are members of the middle class of one of the wealthiest nations on earth.

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