'Vaccine insurance' payoffs unlikely

People line up for COVID-19 testing near a public health center in Seoul, Thursday. Yonhap

Almost none of subscribers could win benefits

By Lee Min-hyung

Korea's insurance firms are playing a joke on customers by offering “vaccine insurance,” as customers can rarely receive any benefits in exchange for providing their personal data when subscribing to the services.

With more than 30 percent of the population having received at least one vaccine shot, non-life insurers here are rushing to launch their COVID-19 vaccine insurance products, targeting those with fears of vaccine side effects. The companies include leading non-life insurers ― such as Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance ― and medium-sized companies and small businesses ― including DB Insurance, Lina Korea and Carrot Insurance.

Customers have been able to sign up for most of the products for free by offering their personal information in the hopes that they can claim payouts if they suffer from any possible vaccine side effects.

But the problem is that almost none of the subscribers could win the benefits, as the vaccine insurance products provide money only to subscribers who have a rare allergic reaction ― anaphylaxis ― following a coronavirus vaccination.

According to data from the Korea Disease Control and Prevention Agency, only 416 cases were reported to have had symptoms of the reaction among the 18.87 million vaccine recipients here, as of the end of June. This rate was equal to a chance of 0.0022 percent, showing that very few of the vaccinated here will experience this life-threatening allergic reaction. Those who have signed up for vaccine insurance can generally receive up to 2 million won ($1,700) if they exhibit the right symptoms.

From left are Samsung Fire & Marine Insurance CEO Choi Young-moo, Hyundai Fire & Marine Insurance CEO Cho Yong-il and DB Insurance CEO Kim Jeong-nam. Courtesy of each firm

Industry sources said that customers should not be taken in by the insurance products simply due to their low subscription costs.

“The vaccine insurance can be seen as a marketing tool for insurers to collect personal information from customers, even if the purpose appears to be in the right direction, amid prevalent fears over repeated reports of side effects following vaccination,” an official from the local insurance industry said.

“We cannot deny the fact that the vaccine insurance generates significant marketing effects at a time when the industry is faced with a structural slowdown,” the source said. “The rise of digitization in the insurance industry is also pushing market players to collect more data from customers, which is in part a reason behind insurers' recent rush to offer vaccine insurance products.”

Some insurers also joined hands with fintech firms to promote the sales of the products. DB Insurance, a mid-tier non-life insurer here, has been selling its vaccine insurance via a financial platform operated by Toss.

But this move has raised controversy, as DB engaged in this sales activity in an untimely manner. In March, Samsung Fire won an exclusive license to sell vaccine insurance for three months. According to regulations, insurers without such a license are not allowed to promote a similar product via third-party non-insurance players ― such as fintech companies ― according to the General Insurance Association of Korea. Any insurers that violate this rule are subject to fines of up to 100 million won, according to the association.

“Even if the vaccine insurance does not cover all of the side effects from vaccination, it can also be seen as part of insurers' corporate social responsibility, in that the insurance products can help the unvaccinated reduce their fears of vaccination to some extent,” an official from a non-life insurer said.