[Becoming an Insurance Insider] Renewal Premiums Will Rise Again Next Year... 'Deficit' in Silseon Insurance

Excessive Medical Treatment Loss Ratio Soars
Trillions in Annual Deficits Persist

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[Asia Economy Reporter Oh Hyungil] The premium increase for the renewal of indemnity medical insurance has entered the countdown. It is expected that premiums for subscribers of the 'old indemnity insurance (1st generation)' sold until 2009 and the 'standardized indemnity insurance (2nd generation)' sold before 2013 will rise sharply.

According to the insurance industry on the 4th, while currently sold indemnity insurance premiums are renewed annually, products sold until 2013 have premiums that change every 3 or 5 years. As contracts are renewed at regular intervals, premiums are expected to increase significantly.

When indemnity insurance contracts are renewed, premiums increase reflecting the expected risk rate as the subscriber ages. In addition, with the recent sharp rise in loss ratios, the rate of premium increase is expected to accelerate steeply.

This increase in loss ratios is greatly influenced by excessive medical use by a small number of subscribers. Last year, the subscriber who received the most indemnity insurance benefits reportedly spent tens of millions of won solely on ‘dosu therapy’ (manual therapy).

According to the top five major non-life insurance companies, among indemnity insurance subscribers of these insurers last year, the top four recipients of outpatient indemnity insurance claims were patients with chronic musculoskeletal pain.

Mr. A (30), who received the highest indemnity insurance payout last year, was found to have received 74.19 million won. He underwent 252 hospital and clinic visits due to ‘limb pain.’ More than 97% of the indemnity insurance medical expenses paid were mainly used for non-reimbursed treatments such as dosu therapy and extracorporeal shock wave therapy.

Among the top 50 indemnity insurance claimants, cases were confirmed where patients received dosu therapy more than 200 times a year for various chronic musculoskeletal pains and spent over 40 million won on non-reimbursed medical expenses.

Notably, all these high-amount recipients are subscribers of ‘1st generation’ or ‘2nd generation’ standardized indemnity insurance, significantly impacting the loss ratio.

An insurance industry official explained, "1st and 2nd generation products have a low self-pay ratio of 0 to 20%, which encourages excessive use," adding, "Establishing appropriate standards for the price and volume of non-reimbursed treatments to suppress excessive medical treatment and medical shopping is a fundamental measure."

Indemnity insurance is expected to incur losses exceeding 3.5 trillion won this year as well. Recently, the non-life insurance industry submitted opinions and evidence to the Korea Insurance Development Institute stating that 1st generation products require a premium increase of more than 15% next year, similar to this year.

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