Do we need COVID-19 Insurance?
Status of COVID-19 in Japan
In mid-January of 2020, the first suspected case of COVID-19 infection was reported. InFebruary, an outbreak was occurred among passengers on a cruise ship, Diamond Princess.
Although Japan’s government implemented strict quarantine measures at airports,
COVID-19 spread from person to person and with the emergence of the highly contagious
Omicron variant, it spread all at once.
There are cases such that even though patients are treated with medical equipment suchas a respirator or extracorporeal membrane oxygenation (ECMO), they end up dying if
they develop severe pneumonia after infected with COVID-19. With the news about
overwhelmed hospitals with COVID-19 patients and deaths of famous people due to
COVID-19 infection, the outbreak prevention measures which include avoiding the 3Cs(Closed spaces, Crowded places, Close-contact settings), wearing masks, washing hands,gargling and taking physical distancing have been highly recommended in Japan.

Number of COVID-19 infections and cumulative
number of deaths in Japan
120000100000
80000
60000
40000
20000
0

感染者数Infections

死亡者数累計Cumulative Deaths

As of the end of June, 2022
Number of Infections in Japan

Vaccination Rate in Japan

Confirmed Cases

9,332,455

First Dose

81.9%

Total Deaths

31,281

Second Dose

80.8%

Third Dose

61.8%

As of June 2022, 10,000 to 20,000 new cases of COVID-19 infections are reported every
day; however, as the uptake rate of Pfizer or Moderna vaccine goes up, the number ofserious cases and deaths is kept low. In addition to vaccination, the spread of effective
medicine against COVID-19 will be the key to suppressing future COVID-19 infectioncases.
Life insurance companies’ handling of COVID-19
As the industry wide response, COVID-19 is included in the insurance coverage forsickness hospitalization benefit when the insured is hospitalized and death benefit when
the insured dies. In addition, with the request of the Financial Services Agency, eachcompany takes special measures, such as setting a grace period for premium payments
and renewal of insurance contracts.
Some insurance companies also take the following special measures.
・ There were times in Japan when the hospitals accepting COVID-19 patients were onthe verge of collapse due to the overwhelming number of patients. Insurance claims
from those who were forced to be discharged or denied admittance by the hospitals
and received medical treatments at the designated hotels and facilities or at home are
accepted and the claims will be paid with and based on the doctor’s medical certificate.
・ Implementing special measures such as interest exemption or discount for policy
loans.
・ Simplifying hospitalization and death benefit claims procedures by omitting some ofrequired documents.
・ If a policy has an accidental death rider, it is also paid out in case of death due toCOVID-19.
Life insurance companies are promoting remote work and as the infection prevention
measure, remote sales through online sales platform and other forms of sales without
physical contact such as through mail, telephone or the Internet is implemented.
Furthermore, every company is working on digitalization to make every aspect of life
insurance procedure more efficient and to improve customer convenience.
For life insurance companies, it is true that there is the increase in the hospitalization
benefit payout due to COVID-19; however, it is also considered that the financial impact
can be small because of the fewer influenza cases. It is also expected that because of theemergence of another infectious disease risk, policyholders would review their existing
contracts and it might lead to new contracts.

Launch of COVID-19 insurance
Some insurance companies launched the new insurance product which will pay a lumpsum payment if the insured is diagnosed with or hospitalized for the specific infectious
diseases including COVID-19. Other insurance companies introduced the additional
coverage which pays double the hospitalization benefit for COVID-19 infection.
As for new products, because of the emergence of the highly contagious Omicron variant,some products were forced to increase premiums or reduce coverage amounts. In the past,
we had been overwhelmed by the excessive claim payments for traffic accident insurance
products due to the increase in the number of traffic accidents owing to the popularizationof automobiles.
When underwriting new risks, it is important to set a clause in insurance provisions toallow companies to change premium rates or coverages, especially if an increase in theincidence is expected.

Oriental Life Insurance Development Center bears sole responsibility for the contents ofthis article.