Cancer insurance spreads

Kyobo Life Insurance said yesterday it has released a new cancer insurance product for the first time in eight years in response to the increasing number of patients suffering from the disease. The insurer stopped introducing new cancer-related products in March 2005 due to financial risks such as high loss ratios.

“Cancer has become a common disease today,” said an official from Kyobo Life Insurance. “And with many cancer symptoms now curable, an increasing number of people seem to be concerned not only over the fact that they have been diagnosed with cancer, but over how they can cover huge treatment costs.”

Based on data from the Ministry of Health and Welfare, one of every three Korean adults who lives to average life expectancy (81 in 2011) suffers from cancer.

According to industry sources, past cancer insurance products weren’t popular with insurance companies. The insured amount the companies were required to guarantee their customers was too high because most cancer symptoms were found in their late stages and incurable.

Today, however, life insurers have studied actuarial data and determined that cancer policies now have the potential to be profitable. With developments in technology and treatments, survival rates of cancer patients have improved and life insurance companies now see the product as one they should target in order to expand their overall market share. At a time of low interest rates and stagnant economic growth, life insurers have been searching for new sources of revenue.

“With the cancer survival rate improving, patients now have to endure longer treatment periods at huge costs,” the official from the insurer said. “Patients also fear secondary attacks.”

According to Kyobo Life Insurance, holders of the new cancer policy can be insured until the age of 100 by renewing their subscription every 15 years. A subscriber who pays 25 million won ($22,446) in premiums can be reimbursed as much as 100 million won depending on the type of cancer.

Along with Kyobo Life Insurance, Hanwha Life Insurance yesterday released a similar product. Samsung Life Insurance introduced a cancer insurance product earlier this year, challenging other small and mid-size insurers like AIA Life Insurance and Tongyang Life Insurance, which already offer cancer insurance.

BY LEE EUN-JOO [angie@joongang.co.kr]