By Tian Hui, Research Institute of Finance, DRC

Research Report, No.141, 2020 (Total 5885) 2020-6-12

Abstract: The insurance industry has played an inseparable role in the global fight against the epidemic, which can be seen in the following three aspects. First, the insurance industry has fulfilled relevant duties within the contract terms. Not only do many insurance products bear the liability for the losses induced by the epidemic, but insurance companies also refund part of premiums according to the loss rate’s reduction of some kinds of insurance. Second, the insurance industry has expanded the liability actively or otherwise, such as making appropriate adjustments to the operation process, and covering the cost of the virus testing through legislation. But it needs to be noted that there are different views over the business interruption insurance. Third, regulators have provided support to maintain the performance of insurance companies to meet their obligations, such as taking measures to ensure adequate capital of insurance companies, and adjusting regulatory rules to provide insurance companies a more relaxed operating environment. We could draw the following enlightenments from the analysis of the above-mentioned facts. The coverage and penetration rate determine the extent of the role played by the insurance industry; this industry can contribute to the fight against the epidemic in many ways; the dividing line of insurance liability should be fixed upon by rules in clear terms.

Keywords: insurance industry, battle against the epidemic, compensation, the world