Next Year's Real Loss Insurance Premium Surge... Only Innocent Commoners Face Increased Burden

Insurance Premiums Expected to Rise Around 10% Next Year
Cataract and Thyroid Over-Treatment Increasing Losses
Excessive Medical Shopping Also Shifting Burden to Ordinary Citizens

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[Asia Economy Reporter Oh Hyung-gil] Jeong Seong-gyeong (43, pseudonym), who supports her 70-year-old father this year, was worried when she heard that the premium for indemnity medical insurance would rise sharply next year. She received a notice from the insurance company that the premium for the indemnity insurance her father had subscribed to in the past would increase by about 70,000 won this time. The premium Jeong has to pay monthly also rose to 130,000 won.

Jeong plans to decide whether to maintain the existing indemnity insurance by paying tens of thousands of won in premiums or switch to a cheaper product this time. She said, "My father often goes to the hospital, so indemnity insurance is essential, and people around me recommend maintaining the old indemnity insurance," but added, "However, the ever-increasing premiums are too burdensome, so I am worried."

Consumers are expressing dissatisfaction over the news that indemnity medical insurance premiums will increase by around 10% next year. In particular, premiums for vulnerable groups such as the elderly aged 60 and over are rising relatively more, increasing their economic burden.

In the market, there are criticisms that excessive medical treatments at some medical institutions, such as cataract or thyroid surgeries, and excessive medical shopping by a small number of subscribers are unfairly transferring the damage to ordinary citizens.

According to the insurance industry on the 27th, the financial authorities are expected to present opinions on the indemnity insurance premium increase rate to the insurance industry this week. The premium increase rate is expected to be decided at a level similar to this year (an average of 10-12%). It is said that this will be the second consecutive double-digit increase following last year.

Even if a 10% increase is decided, the perceived impact by consumers is expected to be over 50%. Subscribers whose indemnity insurance renewal cycle of 3 to 5 years is due will inevitably face a 'bombshell' level premium increase. This is because the increase rate for 3 to 5 years is reflected at once, and the rate increase due to aging is also added.

For the elderly, the increase due to aging is estimated to exceed 5 percentage points annually, so the increase rate is inevitably larger. The third-generation indemnity insurance, which had never increased before, only applied the increase due to aging, but there is a possibility that premiums will be raised for the first time next year.

Kim Jin-gyu (46), an office worker living in Seoul, said, "I used to pay 40,000 won for indemnity insurance premiums, but when I renewed this year, it came out to over 160,000 won, which surprised me," and added, "I tried to switch to new indemnity insurance in July, but even the agents discouraged me, so I am maintaining it reluctantly."

Insurance agents also find it difficult to actively recommend switching to products with lower premiums. They fear that if they suggest changing insurance, they might be resented later.

An insurance agent said, "We recommend switching to customers who feel burdened by premiums, but in most cases, it does not lead to actual switching," and added, "Consultations usually involve reducing some coverage, which appears to be a more favorable method for customers."

Insurance companies are concerned that even if indemnity insurance premiums increase next year, trillions of won in deficits will occur. The indemnity insurance loss ratio in the third quarter of this year (131%) rose by about 9 percentage points compared to three years ago (122.4%). The industry's estimated loss this year reaches 3.5 trillion won. The Korea Insurance Research Institute estimated that even with a 13% increase in indemnity insurance premiums next year, a deficit of 3.9 trillion won will occur.

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