The product comes as a partial response to the increase in Hong Kong’s average temperature, which has risen by 0.30°C per decade from 1994-2023.
AXA states that this trend marks a serious threat to the safety of individuals working in sectors such as construction, property management, and transportation. AXA’s product is uniquely tailored to the requirements of those vulnerable during extreme heat events.
The parametric framework for the insurance ensures payouts are triggered by specific conditions. For this product, this occurs when temperatures exceed 36°C for three consecutive days between August and October.
Insured individuals will receive payouts of HK$100 ($12.83), or anti-heatwave kits of equal value, without the need to submit claims or prove loss. The premium for this insurance is set at HK$19.9 per person.
Parametric approaches eliminate traditional claims processes, ensuring immediate compensation once temperature thresholds are reached. AXA actively monitors the temperature for customers, informing them when they are eligible for payouts.
AXA’s Heatwave Parametric Insurance is backed by the company’s scientific climate model and the expertise of over 150 professionals worldwide. These professionals range from climatologists to underwriting specialists and have ensured the product meets its specific aims.
Emily Li, AXA Hong Kong and Macau Chief Employee Benefits & Wellness Officer, commented: “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.”
AXA also recently revealed its plans to acquire the Italian P&C specialist Gruppo Nobis, as it expands its presence in the Italian market.
