By Na Jeong-ju
Insurance companies may pay up to 450 million won ($433,800) each to survivors and family members of victims of the ferry sinking that occurred off the country's southwestern coast Wednesday, finance officials said Thursday.
The 6,325-ton ferry, Sewol, is also insured against maritime accidents. Its owner Cheonghaejin Marine may receive up to 11.4 billion won ($11 million) from insurance firms.
All passengers are insured for 350 million won by the Korea Shipping Association (KSA). About 330 students and teachers from Danwon High School in Ansan, Gyeonggin Province bought travelers insurance worth 100 million won additionally from Dongbu Insurance.
KSA was reinsured by Korean Re and Samsung Fire & Marine Insurance, and these firms also signed reinsurance contracts with foreign insurers on maritime accidents.
Under these contracts, Korean Re should pay victims up to 3.1 billion won, and Samsung Fire & Marine up to 5 billion won. The rest of insurance payment will be covered by foreign reinsurance firms.
Regarding Dongbu's travelers insurance, the firm is reinsured by Korean Re, and Korea Re is reinsured by multiple foreign reinsurance firms, including Malaysia Re.
Dongbu's insurance payment to the victims is limited to 1 billion won. Foreign firms are responsible for the rest of payment.
"Most of the insurance payment to the ferry passengers is likely to be covered by foreign firms based on the reinsurance contracts they signed with the Korean insurance firms," an official from the Financial Supervisory Service said.
"At the moment, it's difficult to predict how much financial damage the accident will cause to the insurance firms because the number of casualties is still rising. The exact amount of insurance payment will be calculated after the ongoing rescue operations come to an end," he added.
A Dongbu official said the financial damage from the ferry accident is not big because the firm is reinsured by foreign firms.
"However, we will try hard to settle the payment as early as possible. We will offer condolences to the victims' families," the official said.
The sunken ferry, which is valued at 11.4 billion won, is insured for 7.8 billion won by Meritz Fire & Marine Insurance and 3.6 billion won by KSA.
Meritz Fire & Marine and KSA were reinsured by Korean Re and foreign firms, including the world's largest reinsurer Munich Re.
The ferry is also insured by Samsung, Meritz and Korean Re against possible oil spills and wreckage clean-up operations for 100 billion won. But the three firms' insurance payment won't exceed 1 billion won because they were reinsured by foreign firms.
Wednesday's accident rarely affect the stock prices of insurance firms.
Korean Re and Dongbu fell 1.46 percent to 10,150 won and 0.36 percent to 54,800 won, respectively, Thursday. Samsung rose slightly by 0.42 percent to 239,000 won.
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| Some 200 relatives of passengers missing from the sunken ferry, Sewol, disembark at Jindo, South Jeolla Province, Thursday, after inspecting the accident scene. / Yonhap |
The 6,325-ton ferry, Sewol, is also insured against maritime accidents. Its owner Cheonghaejin Marine may receive up to 11.4 billion won ($11 million) from insurance firms.
All passengers are insured for 350 million won by the Korea Shipping Association (KSA). About 330 students and teachers from Danwon High School in Ansan, Gyeonggin Province bought travelers insurance worth 100 million won additionally from Dongbu Insurance.
KSA was reinsured by Korean Re and Samsung Fire & Marine Insurance, and these firms also signed reinsurance contracts with foreign insurers on maritime accidents.
Under these contracts, Korean Re should pay victims up to 3.1 billion won, and Samsung Fire & Marine up to 5 billion won. The rest of insurance payment will be covered by foreign reinsurance firms.
Regarding Dongbu's travelers insurance, the firm is reinsured by Korean Re, and Korea Re is reinsured by multiple foreign reinsurance firms, including Malaysia Re.
Dongbu's insurance payment to the victims is limited to 1 billion won. Foreign firms are responsible for the rest of payment.
"Most of the insurance payment to the ferry passengers is likely to be covered by foreign firms based on the reinsurance contracts they signed with the Korean insurance firms," an official from the Financial Supervisory Service said.
"At the moment, it's difficult to predict how much financial damage the accident will cause to the insurance firms because the number of casualties is still rising. The exact amount of insurance payment will be calculated after the ongoing rescue operations come to an end," he added.
A Dongbu official said the financial damage from the ferry accident is not big because the firm is reinsured by foreign firms.
"However, we will try hard to settle the payment as early as possible. We will offer condolences to the victims' families," the official said.
The sunken ferry, which is valued at 11.4 billion won, is insured for 7.8 billion won by Meritz Fire & Marine Insurance and 3.6 billion won by KSA.
Meritz Fire & Marine and KSA were reinsured by Korean Re and foreign firms, including the world's largest reinsurer Munich Re.
The ferry is also insured by Samsung, Meritz and Korean Re against possible oil spills and wreckage clean-up operations for 100 billion won. But the three firms' insurance payment won't exceed 1 billion won because they were reinsured by foreign firms.
Wednesday's accident rarely affect the stock prices of insurance firms.
Korean Re and Dongbu fell 1.46 percent to 10,150 won and 0.36 percent to 54,800 won, respectively, Thursday. Samsung rose slightly by 0.42 percent to 239,000 won.
