[코리아포스트 한글판 김진수기자] Lee, 67, who lives in Incheon, recently received a notice to renew the loss insurance from Heungkuk Fire and was suspicious of his eyes. This is because it was notified that the monthly real-loss insurance premium, which is renewed in five years, will rise by 264.5% from 36,247 won to 13,2105 won from March.
Mr. Lee said, “Heungkuk Fire & Marine Insurance head office has no problem because this impression is recognized and approved by the Financial Supervisory Service,” he said. “There is no responsibility for the insurance company’s design mistakes.”
◇ Reflected for 5 years + The impression increases with age… Higher rate of increase of Heungkuk Fire Insurance for business management
According to the insurance industry on the 28th, non-life insurers are planning to increase the premiums of the old real-life insurance by 15 to 19% from April. The increase rate of Heungkuk Fire & Marine Insurance does not deviate significantly from this level.
The reason why Mr. Lee’s increase rate exceeded this figure and was hit by the premium bomb is because the renewal period is five years, and the increase rate of the last five years is reflected at once.
However, even taking this into account, 264% is unusual. The financial authorities restrict the fluctuations of real-loss insurance premiums by the insurance industry supervisory regulations so that the fluctuations of actual loss insurance premiums do not exceed ±25% each year. Moreover, this is only an upper limit, but in recent years major insurance companies have been unable to exceed 20% under strict management by financial authorities.
The reason Heungkuk Fire & Marine Insurance was able to apply a particularly high increase rate is that it is subject to exceptions to this regulation. For non-life insurers, such as Heungkuk Fire & Marine Insurance, Hanwha Insurance, and MG Insurance, that need to improve their profitability due to deteriorating profitability, the financial authorities allowed the financial authorities to apply a 25% or higher increase rate.
Heungkuk Fire & Marine Insurance, which started emergency management since 2016, has increased its actual loss insurance premiums by 44.8% that year, 21.1% in 2017, frozen in 2018, 21.8% in 2019, and 22.1% in 2020. It has steadily exceeded 20%.
If this is accumulated and reflected, it has already exceeded 100%, and insurance companies differentiate the increase rate according to gender, age group, and past medical history. Older and older men are subject to a relatively higher rate of increase. In particular, the opinion of the industry is that when entering the 60s, an increase rate of 100% or more can be additionally applied for 5 years only by the age factor. This is why men in their 60s have accepted an increase rate of over 250% in five years.
◇ Medical shopping is still popular due to high excuse and high self-pay rate Damage to good subscribers
The insurance premium bomb is also caused by the fact that the product that Mr. Lee signed up for is the pretext loss with the highest loss ratio. There are three types of real-life insurance, including’preliminary non-life insurance’ sold before October 2009,’standard Japanese-style non-life insurance’ sold until March 2017, and new real-life loss insurance sold from April 2017. Is divided. Insurance premiums are cheaper as you go with newer products, but the copayment ratio increases.
This time, an increase rate of 15~19% was applied to the pretext loss, but the standardized loss was in the early 10% range and the new loss insurance was frozen. The reason why the increase rate is different is that the loss ratio varies by product. The loss ratio for excuses was 142.2% in the first half of last year. It means that he received 1 million won as an insurance premium and paid 1422,000 won as insurance. The standardized loss ratio is 132.2%, and good loss is 105.2%.
The reason why non-life insurers’ real-life insurance has been in the red for a long time is due to the impact of some subscribers”medical shopping’. The phenomenon that some patients and doctors receive or induce over-treatment mainly due to non-payment has not disappeared. Two of the three subscribers (65.7%) receive less than one penny of insurance per year, but the top 10% who frequently go to the hospital receive more than half of the total insurance (56.8%). In particular, in the case of excuses, there is no self-pay, which is inevitably a major target for medical shopping.
It is also difficult for insurance companies. This is because real-life insurance has already become a’the more you sell, the more you lose.’ Real-life insurance is a national insurance that 38 million people have subscribed to. However, only the accumulated deficit from 2017 to 2020 was 6.2 trillion won. In particular, non-life insurers such as Heungkuk Fire & Marine Insurance, which are facing deepening management difficulties, have higher loss ratios than average and have large losses from real-life insurance. Heungkuk Fire & Marine Insurance’s net profit last year was 22.7 billion won, down 40.9% from the previous year.
◇Wrong product design, after a sudden surge in sales… 4th generation loss is not an alternative
However, there are many objections about whether it is correct for insurance companies to focus on raising prices and repairing products in the name of declining profitability. In the end, it is the insurance company that created the current deficit structure by focusing only on selling products with poor design in the first place.
Financial authorities also agree on this. This is also the reason for the recommendation to reflect only 30-40% of the actual loss insurance increase rate required by insurers this year. However, there is virtually no fundamental way to prevent the increase rate of nearly three times. An official from the financial authorities said, “At the time of the launch of standardized insurance with increased self-burden, insurance companies objected to this because the existing insurance (tax loss) was sold well. If the rate of increase is determined at the level of the government and the statute, there is no way to stop it.”
In order to improve these structural problems, the financial authorities and the insurance industry gathered their will to be the fourth generation of losses, which will be released in July. In the fourth-generation real loss, like auto insurance, insurance premiums are discounted when hospitals are used less, and premiums are added when they are used more. It would benefit good consumers who rarely claim insurance claims. However, there are large self-pays such as 10% of salary, 20% of non-payment, and 30% of special contracts. It is not a realistic alternative because it is a difficult structure for subscribers who are in their 60s and whose full-scale medical use is increasing.
The insurance industry is in a position that the government should work to improve the non-payment management system, which is the main culprit for the rise in the loss ratio of real-life insurance. Earlier this year, the Non-life Insurance Association announced that it would recommend strengthening management to the government on non-indemnity insurance items that raise concerns about over-treatment such as cataract multifocal lens implantation and nutrition and beauty injections. An official in the insurance industry said, “Still, some hospitals ask whether to subscribe to indemnity insurance and systematically recommend medical shopping as soon as a patient visits,” he said. “You should not leave such an abnormal situation unattended.”
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