South Korea to Introduce Climate Insurance for Outdoor Workers by 2026
Seoul – In response to worsening summer heatwaves, the South Korean government, in partnership with the insurance industry, is set to launch a climate insurance product by 2026 to protect vulnerable outdoor workers.
The planned index-based insurance will provide income compensation to day laborers who cannot work due to extreme heat. Payouts will be triggered by heatwave warnings and calculated based on four hours’ worth of standard labor wages, with benefits set at ₩84,800 ($62.25) for 100% coverage or ₩67,800 for 80%.
The initiative stems from a memorandum of understanding signed in April between the Ministry of Environment and the General Insurance Association of Korea. A pilot program is scheduled to begin in the first half of 2026, targeting outdoor workers involved in public projects and enrolled in retirement benefit plans.
Between June 15 and July 3, 633 people suffered heat-related illnesses in Korea, including five deaths, according to the Korea Disease Control and Prevention Agency.
“This is about using insurance to reduce financial risks and protect workers facing climate challenges,” said a ministry official. The government plans to subsidize premiums for local governments participating in the program.
The insurance industry is currently halfway through product development and finalizing eligible job categories and payout models. The program may later be expanded based on pilot results.