Everything Except Salaries Is Rising... From Car and Real-Expense Insurance Premiums to ATM Fees (Comprehensive)

Shinhan and Woori Card to Raise ATM Fees Starting Next Month on the 1st
Insurance Companies to Push for Increases in Auto and Actual Medical Insurance Premiums

[Asia Economy Reporters Oh Hyung-gil and Ki Ha-young] With various insurance premiums and card fees set to increase from the beginning of the year, household burdens are expected to intensify. While companies claim these decisions are inevitable due to rapidly changing business environments and deteriorating profitability amid low interest rates, there are concerns that already strained household finances will become even tighter.

According to the industry on the 9th, Shinhan Card and Woori Card will raise fees by 100 to 200 won starting next month for cash services using ATMs and CDs (cash dispensers) operated by Korea Electronic Finance. Currently, fees range from 800 to 900 won depending on the time of use, but from next month, the fee will increase to 1,000 won regardless of the time. This is the first fee increase in 10 years.

The fee hike was made at the request of Korea Electronic Finance, whose operational costs have recently increased, causing a heavier burden. The reduction in cash demand and the rise of simple payment methods have led to decreased use of ATMs and CDs, relatively increasing operational costs. Korea Electronic Finance, a subsidiary of the NICE Group, is the largest financial automation equipment operator in Korea, currently managing about 7,000 automated cash machines nationwide. It is known that Korea Electronic Finance is also negotiating fee increases with other affiliated card companies besides Shinhan and Woori Cards. If other card companies join the fee hike, the burden on consumers using cash services will inevitably increase.

Earlier, insurance companies also planned to raise automobile insurance premiums and indemnity medical insurance premiums at the beginning of the year. Automobile insurance premiums are expected to increase sequentially by around 3% from the end of this month to next month at the earliest. Although financial authorities have requested restraint on the increase, it is expected that the premium hike will proceed due to a significant rise in automobile insurance loss ratios. Non-life insurance companies raised automobile insurance premiums twice last year due to increased minimum wages for repair fees. Authorities are preparing measures to reduce automobile insurance loss ratios. This year, they are working on institutional improvements such as increasing the burden for drunk driving accidents, establishing procedures and organizations for reviewing automobile insurance medical fees, and introducing co-payments for motorcycle insurance.

Indemnity insurance premiums will also increase by up to 9% starting this month. Due to the 'Moon Jae-in Care' policy, excessive treatments such as non-reimbursed oriental medicine, manual therapy, and cataract surgeries have increased, pushing the indemnity insurance loss ratio close to 130% as of the second half of last year. However, premiums for new indemnity insurance policies sold since 2017 are expected to decrease slightly. The new indemnity insurance separates non-reimbursed items like MRI and manual therapy into special contracts with a higher self-pay ratio (30%), resulting in lower premiums.

A financial sector official said, "Financial institutions facing deteriorating profitability due to the low interest rate environment have no choice but to explore various ways to maintain profitability. However, this inevitably translates into a burden for consumers and households."

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.