Insurance Industry "Need to Raise Real Loss Insurance by 20% Next Year"... Is the Government a Variable?

[Asia Economy Reporter Oh Hyung-gil] Insurance companies have begun sending customer notices for next year's increase in actual medical expense insurance premiums. The insurance industry hopes for an increase of more than 20% due to loss ratios, but it is expected to be blocked by the financial authorities' influence.

Earlier this year, insurance companies also attempted double-digit increases, but due to the financial authorities' intervention, the increase was limited to single digits.

According to the insurance industry on the 13th, companies such as Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and DB Insurance have started notifying customers whose actual expense insurance will be renewed in January next year about the premium increase. Insurance companies must notify customers of the planned increase at least 15 business days before the premium increase.

Although there are differences among companies, the increase rate appears to be around 20%. The reason insurance companies are preparing for a significant premium increase is that the structure of actual expense insurance has been running at a loss for a long time as more policies are sold.

According to a report on the characteristics and challenges of actual medical expense insurance claims released by the Korea Insurance Research Institute, as of the end of September, the risk loss ratio of actual expense insurance was 130%. This means that for every 100 won received from subscribers, 130 won was paid out as insurance benefits.

While insurance premiums are fundamentally determined autonomously by insurance companies, the financial authorities intervene directly or indirectly because of the significant impact on the public's livelihood. Last year, the insurance industry tried to raise premiums by 15-20%, but due to last-minute intervention by the financial authorities, the increase was reflected at around 9%. A financial industry official said, "We are currently discussing the increase rate," adding, "The 20% increase is the industry's hope, and whether it is actually possible remains to be seen."

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