The Financial Supervisory Service said on the 2nd that, as of last year, there were 36.22 million individual indemnity health insurance policies in force, up 260,000 (0.7%) from the end of the previous year (35.96 million). Non-life insurers held 30.28 million policies, an increase of 300,000 (1%), while life insurers had 5.94 million, a decrease of 40,000 (0.7%).
By generation, second-generation indemnity insurance accounted for the largest share with 14.94 million policies (41.2%). That was followed by third-generation with 7.83 million (21.6%), fourth-generation with 6.41 million (17.7%), and first-generation with 6.18 million (17.1%).
Insurance premium revenue increased. Last year, indemnity insurance premium revenue was 18 trillion won, up 1.6285 trillion won (10.0%) from the previous year (16.3364 trillion won). Life insurers recorded 3.1909 trillion won in premium revenue, and non-life insurers recorded 14.774 trillion won. By contrast, claim payments rose by a larger margin. Last year's claim payments totaled 17 trillion won, up 11.4% from a year earlier, with out-of-pocket covered charges accounting for 7.3 trillion won (42.9%) and non-covered charges accounting for 9.7 trillion won (57.1%).
Indemnity insurance profitability also deteriorated. On a basis subtracting incurred losses and actual operating expenses from premium revenue, last year's indemnity insurance underwriting result posted a deficit of 1.87 trillion won. That is 250 billion won wider than the 1.62 trillion won deficit a year earlier. In addition to claim payments, about 2.9 trillion won in expenses such as loss adjustment costs and operating expenses were reflected.
Last year's loss ratio on an earned basis for indemnity insurance was 101%, up 1.7 percentage points from the previous year (99.3%). The figure is well above the industry breakeven level of around 85%. By generation, the loss ratio was highest for the third generation at 120.3%, followed by the fourth generation at 115.1%, the first generation at 102.3%, and the second generation at 93.1%. Products from the first and second generations, where the effect of premium increases has accumulated, showed relatively lower loss ratios, and second-generation products, which have the highest overall share, recorded a deficit of about 140 billion won, the smallest loss by generation.
By type of medical institution, clinics accounted for the largest share of total claim payments at 32%. That was followed by hospitals at 21.8%, general hospitals at 17.6%, and tertiary general hospitals at 15%. The share of non-covered benefits was high at clinics (66.2%), hospitals (70.6%), and long-term care hospitals (83.5%), while tertiary general hospitals (41.2%) and general hospitals (42.3%) showed relatively lower levels.
The Financial Supervisory Service (FSS) plans to steer the stable adoption of fifth-generation indemnity insurance to curb excessive non-covered treatments and ease the public's premium burden.