Up to 1 Million Won Coverage for Flu? ... Concerns Over Insurance Fraud

Rising Interest in Flu-Related Products Amid Flu Outbreak Signs
Insurance Industry Temporarily Selling Related Products

With signs of an influenza (flu) outbreak, there is growing interest in insurance products that guarantee diagnosis and treatment for the flu. However, concerns are being raised about the potential for consumer moral hazard as the coverage amount, previously between 100,000 and 200,000 KRW, has been increased up to 1,000,000 KRW.

According to the insurance industry on the 26th, Hanwha General Insurance has been temporarily selling a product since the 10th of this month until the end of the month that covers treatment costs up to 1,000,000 KRW in case of flu infection.

This product is designed so that the insured diagnosed with the flu receives insurance payments when prescribed antiviral medication for treatment. Coverage is available up to 1,000,000 KRW for those aged 16 to 60, and up to 500,000 KRW for other age groups. Not only Hanwha General Insurance, but also Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance have launched products that cover flu treatment costs up to 500,000 KRW.

Stock photo of influenza vaccination.

However, as non-life insurers competitively increase coverage amounts, voices pointing out the risk of inducing consumer moral hazard are also emerging. Since the flu can be easily transmitted just by being near an infected person, there is concern that this could lead to abuse of indemnity insurance.

Additionally, there are concerns about overheated competition within the industry. This is similar to the case earlier this year when the coverage limits for lawyer appointment costs under driver insurance riders were competitively raised, prompting a request for restraint from financial authorities.

Meanwhile, according to the Korea Disease Control and Prevention Agency, as of 6 p.m. on the 25th, the cumulative number of new COVID-19 vaccine recipients aged 65 and older is 1,056,292. The cumulative vaccination rate is 10.8%, four times higher than the 2.7% rate during the same period last year. The agency began vaccinations on the 19th of this month targeting high-risk groups such as seniors aged 65 and above.

Among those aged 65 and older who were vaccinated, 43.8% received the flu vaccine simultaneously. In particular, the simultaneous vaccination rate for those aged 65 to 69, whose flu vaccine and COVID-19 vaccination start date was the same on the 19th of this month, reached 80.1%.