A number of Chinese insurance companies have in recent days shut down their so-called “quarantine insurance” policies, which offer buyers compensation if they’re put under quarantine due to anti-epidemic efforts. Industry insiders said the product removal is partly due to the high number of claims, which is costly for insurance firms, as well as mounting complaints over difficulties in making claims.
Insurance firms including Public Mutual Insurance Corporation and ZhongAn stopped selling quarantine insurance last week, becoming the latest Chinese insurers to shut down the sales.
Under the insurance policy, buyers get a subsidy ranging from several hundred yuan to several thousand if they are quarantined. To attract buyers, some of the promotions were very appealing, even offering to cover lost salary as a result of being quarantined.
However, the terms attached to the policies are reportedly very complicated. The exemptions from liability for insurers include situations such as the insured being quarantined but not paying the expense for it themselves. This has made it hard for buyers to make claims.
Insurers set the premium very low at the initial stage in order to develop the market, making it very hard for insurers to make a profit, according to a report by CCTV.
Industry insiders said that another reason for insurers to remove the policies has been the unexpected new wave of outbreaks across the country, resulting in a surge in claims. Another is the complicated definition of quarantine, with home quarantine leading to more uncertainty and rising complaints.
