Pay attention to the’renewal bomb’ of real loss insurance… Up to 50% increase

Input 2021.02.23 15:05

It is predicted that some of the subscribers who renew their premiums every 3 or 5 years will receive a’renewal bomb’ this year, which is more than 50% this year, while insurers have significantly increased their insurance premiums for indemnity medical insurance, called’national insurance’. have.

According to the insurance industry on the 23rd, insurers decided to increase standardized real-life insurance (second generation) premiums by an average of 10-12%. Standardized real-life insurance is a product that was sold and discontinued from October 2009 to March 2017, and in April of that year, it was replaced with the third-generation new real-life insurance.

This year, insurance premiums rise to around 10%, but in the case of real-life insurance, insurance premiums are often renewed every three or five years. In this case, the increase in premiums that rose during that period is accumulated and reflected all at once, and consumers call it a premium renewal bomb. To prevent such a renewal bomb, the government revised the product structure in 2013 to renew insurance premiums every year, but standardized non-life insurance that was subscribed before that time has a long renewal cycle.

Standardized real-life insurance premiums rose by 9% and 8% respectively in last year and 2019. Some insurance companies were frozen in 2018, but increased by up to 20% in 2017. If you subscribe to insurance that renews every five years and is about to be renewed this year, you will get a’insurance renewal bomb’ that is close to 50% if you include the premium increase this year. In particular, if the difference in the increase rate according to gender or age group is applied, older and elderly men may receive a higher increase rate.

In particular, the increase may be even greater for subscribers who are about to renew their “first generation” old indemnity insurance that sold until September 2009. According to the insurance industry, pretext non-life insurance increased by 10% each in 2017 and 2019, excluding 2018, and an average of 9.9% last year. This year’s increase rate is expected to be applied from 15 to 19%. Initially, the preliminary loss insurance was expected to increase by 15-17% in April, when the adjustment was made, but on the 18th, Samsung Fire & Marine Insurance, the No. 1 industry in the industry, announced in a conference call that it will raise the premium for impairment loss to the largest 19% in the industry. It was confirmed that it is applied at the level.

Accordingly, the cumulative increase rate for five years, including this year’s increase, is expected to reach 53~58%. The first-generation insurance, pretext non-life insurance, was sold until September 2009 and went out of print, but 8.7 million people are still enrolled.

An official in the insurance industry said, “Since the loss ratio of indemnity insurance continues to rise, the financial authorities seem to be in an atmosphere of’acceptance’ to some increase this time.” “For subscribers who renew every 3 to 5 years, the increase of more than 10% this year Including that, the rate of increase experienced will be significant.” According to the insurance industry, in 2019, the risk loss amount (loss of insurance payments paid to income insurance premiums) recorded 2.8 trillion won and the risk loss rate (insurance payment ratio to income insurance premiums) recorded 133.9% in 2019.

In the industry, if premiums continue to rise like this, there may be a movement to change to true non-life insurance or the ‘4th generation’ incurable loss insurance, which is scheduled to be released in July, centering on those who have incumbent insurance. In the case of insurance, the loss ratio is managed separately for each type of insurance, and in the case of true loss insurance, insurance premiums are generally frozen.

Another insurance industry official said, “Even after the corona, the insurance industry will continue to insist on rising loss insurance premiums due to the rising loss ratio due to moral (moral hazard) patients and normalization of hospitals.” He said, “There will be many subscribers who are thinking about whether to keep their existing insurance or change to a new insurance with the actual loss insurance, as they support the introduction of the 4th generation loss insurance, etc.”