A deserted Myeongdong, a popular shopping spot in Seoul. (Yonhap)
SEOUL, Sept. 17 (Korea Bizwire) — A new non-life insurance product to compensate individuals and businesses for financial losses caused by the spread of infectious disease like COVID-19 is expected to be available late next year.
The Korea Insurance Development Institute (KIDI) announced on Wednesday that it had started developing an infectious disease risk evaluation model to design a new non-life insurance product that can compensate individuals and businesses for the financial damages caused by the spread of infectious diseases.
At present, life insurance and actual loss insurance products cover only the treatment costs for patients suffering from infectious diseases.
These types of insurance products do not offer compensation for the financial losses caused by the suspension of business activities and delay or cancellation of events resulting from social disasters like the COVID-19 pandemic.
Insurance companies cannot afford to develop non-life insurance products that can satisfy such needs, since they do not have enough experience or data to calculate the premium rates for such products.
Based on its previous experience in developing a variety of non-life insurance products, including ones that cover damages caused by typhoons, floods or heavy rainfall, the KIDI decided to develop an infectious disease risk evaluation model over the next year.
The KIDI explained that after developing the model, it will design a non-life insurance product to cover infectious diseases through consultations with insurance companies and supervisory authorities.
“We’re planning to design the infectious disease insurance product towards providing compensation not only to business owners who suffer losses due to the government’s disinfection measures but also to individuals who suffer damages due to the delay or cancellation of important events such as wedding ceremonies or trips,” the institute said.
Lina Jang (linajang@koreabizwire.com)
