The rise of Japanese insurance has a warning for all of us

More than 200 years ago, the best Japanese poets complained about the unbearable heat of summer. Issa Kobayashi, in particular, could haiku perfectly on the appreciation of the sadness he felt for three drops of cold rain.

But in a time of heat, international notices to stay at home and increasing hospitals, complaining about music is not enough. Japan is becoming more and more vulnerable, people are dying and insurers are innovating.

Few countries have not experienced extreme temperatures in recent years, and many studies predict that such events will increase globally. But Japan, as a leading economy with one of the world’s lowest-income, shrinking and aging workforces, has taken a different approach to the heatwave and warnings that are being sounded around the world. Japan’s recent creation of heatstroke insurance, while garnering attention as a piece of business innovation, tells a sobering story about who it will cover.

The motivation for seeking cover from the heat wave is reflected in the numbers made up to the year 2022. This year’s rainy season was the shortest since the same record began in 1951. Also in June, a total of 15,657 people were hospitalized due to heatstroke or fatigue, double what happened ten years ago. Since July 1st, households and businesses have been experiencing occasional power outages to prevent blackouts.

The big picture is no longer scary. A A government report in 2018 identified the areas where climate change could affect Japan the most. An increase in “significant losses” in manufacturing, trade and construction have all been recent, it said, as has the number of heat-related illnesses among the aging population.

In this exhibition has swept the heat insurance – a product of companies that sometimes ignore the innovation and the eagle’s eye on the new problems of Japan.

Japan’s five major insurance groups have, since April, started offering a form of heat protection – add-ons to health or accident insurance that start at about Y220 ($1.65) a month and pay out in the event of death from heatstroke, hospitalization or external treatment such as intravenous drips. vein. Supporters include Sumitomo Life, Mitsui Sumitomo Insurance and Sompo Holdings – companies that have described the explosion of policy when the temperature rises.

They know their market and its fears well. Notable among insurance takers have been parents buying policies before school play days and other past incidents of kids running out.

By and large, say the companies, the products were bought by (or) people over the age of 65 – a group that now represents 29.1 percent of the Japanese population. That number alone shows the magnitude of the problem that Japan is facing as summer heats up and residents become increasingly vulnerable.

But population alone cannot explain the amount of heat insurance: surely the over 65s can isolate themselves under the air conditioning that is installed in 92 percent of Japanese homes (with at least two members) and avoid the risk of heatstroke altogether? The problem – and this is where Japan’s economic education begins to sound strongly beyond its limits – is that for many it is not because more than 9mn “retirees” are still working. Often outdoors, and often in uniform.

For most of Japan’s booming 1970s and 80s, more than 90 percent of Japanese people considered themselves middle class. The most recent Cabinet Office survey still put the figure at 89.1 per cent. The problem is that people’s perception of middle class is not based on chatter, but on expectations. Chief among them is the idea that a working life that ends at around 65 can be followed by a healthy rest. But this is no longer the case in Japan. In 2011, 36 percent of 65- to 69-year-olds and 23 percent of 70- to 74-year-olds were still working, many of them perhaps fearing that their pensions were insufficient to guarantee a good life. Last year, this number was 50 percent and 32 percent respectively.

These are people who know – or who nervous children know – are at risk of heatstroke, even though they claim to be middle-class members of the richest countries in the world.

leo.lewis@ft.com