Next year's actual insurance premiums are expected to rise by 7.5%, increasing the burden on low-income earners. Actual insurance has 40 million subscribers and is referred to as 'the second health insurance.'
The Life and Non-Life Insurance Association noted on the 24th that the average premium increase rate for overall actual insurance for next year has been calculated at 7.5%. This is 0.7 percentage points lower than the average annual increase rate of 8.2% over the past three years.
By generation, the first generation will see a 2% increase, the second generation will see a 6% increase, the third generation will see a 20% increase, and the fourth generation will see a 13% increase, respectively. The first generation refers to actual insurance subscribed before August 2009. The second generation includes policies subscribed from after that date until March 2017, the third generation from after that date until June 2021, and the fourth generation includes policies from then to the present.
The association believes that premiums have increased due to rising loss ratios from excessive treatments for some non-covered items. In the first half of this year, the loss ratio for actual insurance from large non-life insurance companies was 118.5%, a slight increase from last year’s 118.3%. Particularly, the loss ratio for the fourth generation was at 130.6% in the first half of this year. A loss ratio exceeding 100% means that the insurance company received 1 million won in premiums but paid out more than 1 million won in claims, resulting in a deficit.
However, the announced premium increase rate is not uniformly applied to all subscribers. The increase rate varies by renewal period, type, age, gender, and each insurance company's loss ratio. Actual premium increase levels for individuals can be confirmed through 'premium renewal notices' sent by insurance companies when their policy contracts are renewed. The renewal periods are 3 to 5 years for the first generation, 1 to 3 years for the second generation, and 1 year for the third and fourth generations.