• Sun
  • Aug 31, 2014
  • Updated: 7:42pm
NewsChina Insider
WEATHER

Heatwaves hit Hong Kong and China, ‘high temperature insurance’ takes off

PUBLISHED : Wednesday, 28 May, 2014, 1:42pm
UPDATED : Thursday, 29 May, 2014, 8:25am

Hong Kong and large parts of mainland China are expected to be hit by the year’s first round of heatwaves in the next few days.

The Hong Kong Observatory forecast that daytime temperatures in the city would soar to 33 degrees Celsius on Wednesday and remain steady until the weekend. It described the weather as “very hot” and is likely to issue heat warnings for the rest of this week.

The same heatwave is expected to hit China’s southern provinces of Guangxi and Guangdong in the next three days.

Temperatures in most coastal regions in eastern and southern China, and major regions in Xinjiang have already shot up to 32 degrees, according to the National Meteorological Centre.

In northern China’s metropolis Tianjin and the provinces of Hebei, Shandong, and Henan, authorities issued “orange” high temperature warnings as rising temperatures there were set to surpass 40 degrees by Friday.

As this year’s first heatwave seems to mark the point at which summer has finally arrived, one mainland online insurance company is seeking to profit from the scorching weather.

Zhong An Online Property Insurance Co., China's first online insurance firm, launched “high temperature insurance” this week via online shopping giant Taobao.

Jointly backed by China’s top e-commerce firm Alibaba, internet giant Tencent and leading insurer Ping An Insurance, the company offers compensation to policy holders if the number of days with temperatures of 37 degrees or above in the client’s city surpasses a certain threshold, which varies depending on the city, between June 21 and August 23.

The company says the premium aims to compensate for the extra living costs borne by the public in scorching hot weather.

The insurance is sold for 10 yuan (HK$12.60) for each policy ‘unit’, and customers may buy up to 99 units as they wish. For each policy unit, they will receive a premium payout of five yuan for each day experiencing high temperatures that surpasses the minimum requirement of days. This requirement varies largely among the cities throughout the country.

For the central metropolis Chongqing, known for its unbearably hot summer weather, temperatures must exceed 37 degrees for 28 days out of a period of roughly two months in order for the insurers to pay out. However, for some cities in China’s chilly northeast, clients can benefit from a premium paid out for any day that experiences a high temperature.

But some analysts say the temperature requirements of the policy may be hard to meet, according to historical weather data.

So far data on Taobao.com shows that 20,000 insurance policy units have been sold as of Wednesday noon. 

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sipsip1238
So they've created a market where they are betting on the weather...excellent work.
 
 
 
 
 

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