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China’s southern province of Hainan has rolled out the first specially-designed insurance cover for businesses affected by the coronavirus outbreak.
The scheme has reserved CNY200m ($28.7m) to cover payouts, the Reuters reported citing a notice released by China Banking and Insurance Regulatory Commission (CBIRC).
The Hainan government will subsidise 70% of the premium, which amounts to CNY140 ($20.9m), for the 100 key pre-approved businesses.
However, the name the businesses or sector which will get covered is not mentioned in the notice.
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By GlobalDataThe six-month insurance product has been launched by 12 insurers including PICC, China Pacific Insurance Co, and Ping An Insurance Group.
The scheme provides cover for production losses, wages paid to employees in quarantine, and fees incurred due to the suspension of operations, the report added.
The CBIRC notice stated that “there are lingering concerns that the resumption of business operations will lead to more cases of coronavirus infection, and cause production to come to a standstill due to the quarantine policies.
“The insurance will play its role of ‘social stabilizer’, and help companies to come through difficult times.”
Over the past three weeks, China has implemented travel bans, isolated cities, and grounded flights to combat the spread of the virus.
Many factories have been shuttered, disrupting supply chains in the country and beyond.
It has been reported that regulators have begun speeding up the approval and launch of cheap life insurance products
They have also injected funds into the financial system to counter the growing pressure on the economy.
Earlier this month, the Chinese central bank has injected $173bn into the financial system to ensure adequate liquidity.
Last month, Hong Kong’s Insurance Authority (IA) shut down its office for five days amid the coronavirus outbreak.
Coronavirus update
The Chinese city of Wuhan is the epicentre of the novel coronavirus, officially named as Covid-19 by the WHO, which has claimed 1,873 lives as of 18 February.
The total number of positive cases has exceeded 73,000 of which 72,436 are in mainland China.
The disease has spread to over 27 countries worldwide.
World Health Organization (WHO) has declared the coronavirus outbreak a public health emergency of international concern (PHEIC).
Due to the outbreak, the first death outside China was reported in the Philippines.
