Last Year’s Insurance Fraud Hits Record High... "Surge in Livelihood-Related Insurance Fraud"

Insurance Fraud Amounting to 880.9 Billion KRW
Detected Individuals Also 92,538, Up 16.9% Compared to Previous Year

[Asia Economy Reporter Ki Ha-young]#. An imported car parts company, Company A, forged documents to disguise parts that were not supplied to repair shops as supplied parts. Through this, they were able to collect about 1.1 billion KRW in insurance money from 11 non-life insurance companies.

#. Four Korean medicine hospitals, including oo Korean Medicine Hospital, falsified medical records by recording non-reimbursable Korean medicine treatments as non-reimbursable Western medicine treatments, which are not covered by indemnity insurance. As a result, numerous insurance consumers colluding with the hospitals embezzled 120 million KRW in indemnity insurance payments.

According to the Financial Supervisory Service on the 11th, the amount of insurance fraud detected last year was 880.9 billion KRW, an increase of 10.4% compared to the previous year. This is the largest amount ever recorded.

The amount of insurance fraud detected has been on the rise, with 654.8 billion KRW in 2015, 718.5 billion KRW in 2016, and 730.2 billion KRW in 2017. The number of people caught for insurance fraud also increased by 16.9% to 92,538 compared to the previous year.

In particular, the proportion of livelihood-type insurance fraud, such as exaggerating damages after traffic accidents or falsely claiming insurance money for injury and disease products, is increasing.

Most of the detected insurance fraud cases were small-scale. The average amount detected per person was 9.5 million KRW, and 82% of the detected cases were below this average. Among all detected insurance fraud cases, those under 1 million KRW accounted for 29.4%, under 3 million KRW for 58%, and under 5 million KRW for 71.7%.

By occupation, insurance fraud by full-time housewives and unemployed persons increased. The number of full-time housewives caught for insurance fraud was 9,987, an increase of 21.8% (1,787 people) compared to the previous year. The unemployed and day laborers also increased by 14% (1,077 people) to 8,766. On the other hand, general office workers increased by only 2.6%, and general self-employed persons decreased by 24.4%.

By age group, it is notable that insurance fraud among the elderly aged 60 and over is on the rise. Last year, 17,450 elderly people aged 60 and over were caught for insurance fraud, accounting for 18.9% of the total. This shows an increasing trend compared to 14.3% in 2017 and 16.4% in 2018.

By insurance type, insurance fraud using non-life insurance amounted to 802.5 billion KRW, accounting for 91.1% of the total. Life insurance accounted for 78.5 billion KRW, or 8.9%.

A Financial Supervisory Service official said, "To establish a sound insurance market order and prevent financial leakage and damage to the public caused by insurance fraud, we will strengthen investigations into insurance fraud in cooperation with investigative agencies and related organizations such as the National Health Insurance Service. We will continuously promote improvements in systems and work practices, as well as provide education and publicity activities to prevent insurance fraud."

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