Market Vendors to Enroll in Fire Insurance... Introduction of 'Joint Underwriting System'

Benefits for 1,853 Markets and 260,000 Stores Nationwide

The government is introducing a joint underwriting system to improve the difficulties market merchants face in subscribing to fire insurance. It is expected that fire insurance subscription will become easier at 1,853 markets nationwide and over 260,000 stores.

The Ministry of the Interior and Safety and the Financial Services Commission announced on the 13th that, considering the fact that markets are vulnerable to fire incidents and the scale of damage is large when fires occur, insurance companies have been reluctant to provide fire insurance to market merchants, they will introduce a joint underwriting system.

A vendor is moving a gift box at Gwangjang Market in Jongno-gu, Seoul. Photo by Kang Jin-hyung

Due to these circumstances, traditional markets could receive compensation by subscribing to fire mutual aid products from the Small Enterprise and Market Service, but it was difficult to receive compensation because insurance subscription was impossible in general shopping districts excluding traditional markets. The fire insurance subscription rate in traditional markets is below 30%.

Since May, the Ministry of the Interior and Safety has operated a public-private joint 'Traditional Market Fire Insurance System Improvement Joint TF' and decided to introduce the joint underwriting system so that market merchants can subscribe to fire insurance. The joint underwriting system is a method where the Fire Insurance Association underwrites items that are refused by insurers, and insurance companies share the responsibility jointly.

The scope of joint underwriting, which had been limited to special buildings and apartment complexes under 15 floors, has been expanded to include shopping districts such as traditional markets and commercial revitalization zones. Newly covered are 1,388 traditional markets nationwide, 115 alley-type shopping districts, and 350 underground shopping districts.

The Financial Services Commission approved the 'Amendment to the Mutual Agreement on Joint Underwriting of Fire Insurance for Special Buildings, etc.' applied for by the Fire Insurance Association on the same day, reflecting these changes.

Lee Han-kyung, Director of the Disaster Safety Management Headquarters at the Ministry of the Interior and Safety, said, "Since the issue of fire insurance subscription has been resolved through this system improvement, we hope market merchants will actively subscribe to fire insurance."