After Filing Insurance Claims... 100,000 Out of 7.7 Million Cases Unpaid

[Asia Economy Reporter Oh Hyung-gil] The number of insurance claims filed by policyholders against insurance companies nearly reached 7.7 million last year. Among these, cases where insurance payments were not made amounted to 100,000. As the rate of non-payment of insurance claims increases, consumer dissatisfaction is also rising.

According to the insurance claim and non-payment status disclosed by the Life and Non-life Insurance Association on the 3rd, the total number of insurance claims filed with life and non-life insurers last year was 7,686,847 (excluding automobile insurance), a 19.0% increase from 6,455,471 claims the previous year.

The number of insurance claims has been increasing annually. This is analyzed to be due to multiple factors such as the increase in the total number of insurance contracts, diversification of insurance coverage, and early diagnosis through health checkups.

The number of claims filed with non-life insurers was overwhelmingly higher than those with life insurers. Non-life insurers recorded 2,922,255 claims in the first half and 3,283,164 claims in the second half, representing increases of 22.8% and 24.4% respectively compared to the same periods the previous year.

On the other hand, life insurers recorded 737,216 claims in the first half and 744,212 claims in the second half, showing increases of 2.8% and 3.0% respectively compared to the same periods the previous year. This is interpreted as more claims being filed for non-life insurance products such as actual medical expense insurance or long-term personal insurance.

The number of non-payment cases, where claims were filed due to illness or accidents but payments were not made, totaled 103,325 cases?94,400 for non-life insurers and 12,885 for life insurers?showing a sharp increase of 24.1% from 83,237 cases the previous year.

As insurance claims increase, the number of non-payment cases also rises proportionally; however, the growth rate of non-payment cases is higher, indicating a trend of more cases where insurance payments are not received.

The non-payment rate, which is the ratio of claims not paid upon filing, increased for life insurers compared to non-life insurers. Life insurers’ non-payment rates were 0.89% and 0.85% in the first and second halves of last year, up by 0.07 and 0.02 percentage points respectively from 0.82% and 0.83% in the same periods the previous year. Meanwhile, non-life insurers’ rates were 1.41% and 1.5% last year, showing a slight increase or remaining at the same level compared to 1.34% and 1.5% the previous year.

The main reasons insurance companies do not pay claims are violations of the duty of disclosure and exemptions stipulated in the policy terms. Insurance contract holders have the obligation to disclose important information necessary to assess the risk of incidents, such as the presence or absence of diseases, when entering into an insurance contract.

Because of this, complaints have been raised that insurance companies sometimes fail to properly inform policyholders about the duty of disclosure when selling insurance, later using this as an excuse to deny payments.

An industry official advised, "When purchasing insurance, it is important to thoroughly check the duty of disclosure items through agents or call centers," adding, "It is also necessary to understand in advance the exemption conditions and expiration periods of the insurance products you have subscribed to in order to prevent unfortunate cases where insurance payments are not received."

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