'Infectious Disease Insurance Coming'... Korea Insurance Development Institute Begins Developing Infectious Disease Risk Assessment Model

[Asia Economy Reporter Oh Hyung-gil] The Korea Insurance Development Institute announced on the 16th that it will begin developing an infectious disease risk assessment model.

Leveraging its experience in developing typhoon, flood, and heavy rain models, the institute plans to develop an infectious disease risk assessment model and collaborate with the insurance industry and regulatory authorities to design insurance products based on the model, aiming to reduce coverage blind spots.

Currently, life and indemnity insurance provide coverage for new infectious diseases such as COVID-19, but there are coverage gaps for business interruptions, travel cancellations or suspensions, and event cancellations.

The infectious disease model will evaluate the likelihood and impact of future outbreaks by reflecting variables such as the characteristics of past infectious diseases, population density, population movement, and quarantine levels.

The institute plans to develop the infectious disease risk assessment model over the course of the next year.

A representative from the Korea Insurance Development Institute stated, "Since 2015, we have been developing risk assessment models for natural disasters with limited historical data," adding, "We will utilize this experience to develop an infectious disease risk assessment model and consult with the insurance industry and regulatory authorities to design insurance products based on the model that meet market coverage demands."

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