14% Increase Predicted... Actual 80% Surge in Real-World Insurance Premiums? (Comprehensive)

Renewal at 3 and 5 Years Jumps Higher Than Expected
Interest Also Grows in Whether Car Insurance Premiums Will Increase

[Asia Economy Reporter Oh Hyung-gil] Mr. Choi Seong-tae (58, pseudonym) recently received a notice from his insurance company that his actual medical expense insurance premium would increase from the current 100,000 KRW per month to 180,000 KRW. This is nearly three times the increase of 30,000 KRW from three years ago. Although those around him advised not to cancel the insurance because the coverage was good for policies taken out in the past, he is seriously considering maintaining it due to the premium burden. Mr. Choi expressed dissatisfaction, saying, "There have been no claims for insurance benefits in the past two years, but the premiums keep rising," and "I don't understand why it keeps increasing when I haven't actually received any benefits."

Subscribers are voicing complaints as the actual expense insurance premium hikes for the new year have risen more than expected. Although the economic and psychological burdens have increased, they face a situation where switching to a new insurance policy would result in losses. Additionally, with automobile insurance premium adjustments scheduled soon, if premiums rise further, the burden felt by households is expected to increase even more.

According to the insurance industry on the 7th, the average overall increase rate for 1st to 3rd generation actual medical expense insurance is about 14.2%. However, some subscribers who renewed contracts for 3 or 5 years at once have seen premiums rise more than expected, leading to a surge of complaints posted mainly on internet communities.

On one community, Jo Seong-ok (38, pseudonym), who identified as an office worker, said that her actual expense insurance was automatically renewed this month, and the premium rose from 50,000 KRW to 90,000 KRW. Jo said, "The existing actual expense insurance has good coverage but is expensive, while the 4th generation actual expense insurance has cheaper premiums but many things are not covered," and expressed concern, "If I think I will be visiting hospitals more often in the future, wouldn't switching insurance now be a loss?"

The increase in actual expense insurance premiums is mainly due to excessive medical use by some subscribers and indiscriminate application of non-reimbursable fees by medical institutions. Experts point out that despite knowing the problem, only premium adjustments are made without fundamental improvements to the system, passing the burden directly onto the majority of consumers.

Insurance agents also have no clear alternatives. An agent working in Yeongdeungpo-gu, Seoul, said, "Since the end of last year, the number of customers consulting about whether to maintain their actual expense insurance has surged," adding, "If the economic burden is low, I advise them to maintain it for the time being and consider switching at the next renewal."

Another agent lamented, "Some insurance companies actively demand switching actual expense insurance, but from the perspective of dealing with customers, if I recommend switching first, I might be blamed later, so I have no choice but to respond passively."

With the bombshell increase in actual expense insurance premiums and the possibility of automobile insurance premiums rising soon, there is a possibility that dissatisfaction among insurance subscribers will increase further. Insurance companies maintain that, if not immediately, automobile insurance premiums will need to be raised in the long term.

Since the COVID-19 pandemic, automobile insurance loss ratios have stabilized, and it is estimated that automobile insurance turned a profit last year for the first time in four years. However, they argue that accumulated deficits over several years and restraint in premium increases last year necessitate premium adjustments to reflect reality. Last month, automobile repair labor costs also increased by 4.5%.

The financial authorities plan to discuss with the insurance industry the possibility and rate of automobile insurance premium increases after February, when last year's automobile insurance performance data becomes available.

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