Reinsurance News

Major industrial fire in Korea set to hurt market while insurers avoid big costs

22nd June 2021 - Author: Staff Writer

Korea’s fire insurance industry could be left reeling from a $360 million dent in profitability after a logistics centre yesterday was engulfed in flames, according to reports from The Korea Times.

South Korea FlagInterestingly however, the same report describes how all four of the insurers involved look set to avoid paying any considerable sums

Seoul-based non-life insurers DB Insurance, KB Insurance, Lotte Non-Life Insurance and Heungkuk Fire & Marine Insurance signed the joint property insurance worth $353.16 million for the warehouse.

Of them, DB Insurance is said to have the largest liability of 6%, with KB and Lotte following the list with 23% and 15%, respectively.

DB Insurance confirmed Tuesday that it would pay up to 7 billion won for Coupang under the reinsurance contract with Korean Re.

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“The exact damage over the recent disaster has not been accurately calculated, but we will pay as much as the amount due to the contract,” an official from the insurer told the KoreaTimes.

“This will enable the other three insurers to pay a much smaller amount of money to Coupang.

One official claimed it could take a few years for the company to figure out the exact amount of its insurance payment if any legal dispute occurs among related parties while settling the issue.

“There are so many variables that we have to take into account, so it is hard for us to share any estimated figures for the time being,” the official said.

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