The Korea Insurance Development Institute (KIDI) announced on Wednesday, Sept. 16, its plans to develop an insurance product covering individuals and businesses of financial damages brought by the spread of infectious diseases.
According to the agency, the product will come available once the risk evaluation model was designed, along with the cost of the projected treatment from infectious diseases. Either way, the availability is expected in late 2021.
KIDI claimed the agency is in the first stages of developing non-life insurance covering the infectious diseases, as it needs further study and research on the cost of the premium rates. Moreover, the agency also needs to go through a series of consultations with insurance firms.
The life insurance products these days don’t cover actual losses due to the pandemic, but policyholders who got infected by the COVID-19 virus enjoy free hospital treatments. This type of insurance doesn’t cover the suspension of businesses, delay or cancellation of events, and other financial losses.
Part of the reason why insurance products don’t cover for the mentioned losses is the lack of data for calculating the rates of disasters. Additionally, insurance companies don’t have experience in setting up premiums for a non-life insurance product with comprehensive benefits for infectious diseases.
“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,” said KIDI.
The agency is looking at creating evaluation models to include infectious disease in the insurance coverage for the Korean market. This evaluation will need input from insurance companies as well as existing policyholders.
The Korea Ministry of Health and Welfare will expand the National Health Insurance coverage to improve the healthcare of citizens and strengthen the medical service in the country.