Premiums for next year's indemnity medical insurance will rise by an average of about 7.8%. The General Insurance Association of Korea and the Korea Life Insurance Association said in an explanatory document on the 23rd that the average overall increase for next year's indemnity medical insurance was calculated as a weighted average of about 7.8% based on premiums.
This increase is 1.2 percentage points lower than the average overall annual increase of 9.0% over the past five years. However, the gap by generation is large. The first-generation plan is expected to see an increase in the 3% range and the second generation in the 5% range, while the third generation is expected to be in the 16% range and the fourth generation in the 20% range.
According to the insurance industry, as of the third quarter this year, the risk loss ratio for indemnity insurance was 119.3%, up from 116.6% last year. The resulting risk loss was estimated at about 2.1 trillion won. The loss ratio for the fourth-generation indemnity insurance, launched in July 2021, rose to 147.9% in the third quarter. A loss ratio above 100% means an insurer is in the red because claim payments exceed premium income.
By generation, the loss ratios were 113.2% for the first generation, 112.6% for the second generation, and 138.8% for the third generation. The insurance industry says premium hikes are inevitable as excessive treatment continues in some nonreimbursable items, piling up cumulative losses.
The general and life insurers' associations said they will actively cooperate with government policy to implement measures to restructure indemnity insurance, including normalizing the medical system around essential care, reducing the public's medical cost burden, and ensuring appropriate medical cost coverage. They also said this increase rate reflects insurers' average levels and is not a figure uniformly applied to all policyholders. The associations said individuals can check the actual level of their premium adjustments when their policies are renewed, through notices sent by their insurers.