"Losses on Every Sale": Lax Management of K-Sure Group Insurance... Loss Ratio Exceeds 100% for Five Consecutive Years

There have been criticisms that the group insurance business for small and medium-sized enterprises operated by the Korea Trade Insurance Corporation (K-Sure) is being managed in a lax manner. The organization appears to be stuck in a deficit structure due to insufficient risk management.

Korea Trade Insurance Corporation Building. Photo by Korea Trade Insurance Corporation

According to the office of Assemblyman Kim Sungwon of the People Power Party, K-Sure's group insurance loss ratio has exceeded 100% for the past five years (from 2020 to August 2025). The loss ratio peaked at 175% in 2020, then recorded 120% in 2021, 143% in 2022, and 127% in 2023. However, it rose again to 143% in 2024. This means that the insurance payouts K-Sure had to cover have always exceeded its premium income.

The problems with K-Sure's group insurance business go beyond inefficient management. On August 26, K-Sure signed a memorandum of understanding (MOU) with the Korea Pharmaceutical Traders Association to promote a group insurance business aimed at fostering pharmaceutical and biotech companies and expanding exports. When asked about the expected number of participating member companies by industry and size, K-Sure only responded that it was "under discussion." This indicates that inadequate demand surveys and insufficient financial reviews are leading to deficits in new business initiatives.

The system designed to prevent financially unsound companies from joining is equally inadequate. Currently, even companies with a G rating-those with extremely poor financial health due to reasons such as a disclaimer of opinion in their audit report, three consecutive years of net losses, or complete capital impairment-are eligible to join this insurance. The corporation only excludes companies with an R credit rating, those involved in fraudulent export contracts, or those delinquent in premium or guarantee fee payments. Since group insurance premiums are about 50% lower than those for individual insurance, it is structurally likely to attract high-risk companies. Korea Trade Insurance Corporation explained, "It is difficult to estimate the expected loss ratio by exporter risk grade."

Assemblyman Kim Sungwon stated, "Expanding the group insurance business without demand verification or risk mitigation measures, despite chronic deficits, is irresponsible administration. The corporation must prioritize financial soundness and strengthen the criteria for restricting high-risk companies from joining."

Kim Jihyun, Law Times Reporter

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