Sending notice to new loss and standardized loss subscribers
“I need a double digit increase to meet the budget calculation”
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In the News Reporter Jeon Geon-wookㅣInsurance companies have announced an increase in insurance premiums of up to 20% or more for customers whose in-loss medical insurance will be renewed starting next month.
According to the insurance industry on the 14th, insurers that deal with real-life insurance have sent product notices to inform subscribers about to renew their real-life insurance in January next year, informing them of the rate of increase in insurance premiums of around 10-20%. The guide targets are’standardized real loss insurance’ sold since October 2009 and’new real loss insurance’ introduced in March 2017.
It is reported that the rate of increase may be applied to standardized loss subscribers up to 20%, while for faithful loss subscribers up to 10%. However, the’old real non-life insurance’ sold before October 2009 was not included in this guide because the time of renewal was April.
Insurance companies are forecasting that the risk loss rate will exceed 130% this year as a trend until the third quarter, and they are in the position that they must raise premiums to the level of the statutory increase rate upper limit (25%) in order to meet the profitability. The risk loss ratio refers to the amount of insurance paid to the risk insurance premium by subtracting contract management and recruitment costs from the total premium.
In fact, the risk loss amount (insurance payment-risk insurance premium) of real-life insurance last year was 2.8 trillion won, and the risk loss rate was 133.9%. In particular, unpaid care, which is not covered by health insurance, is one of the main reasons for increasing the risk loss rate.
As a result, insurance companies demanded a double-digit premium increase last year: pretext loss and standardized loss. However, the rate of increase was only 9%, contrary to the negative financial authorities due to the sudden increase in premiums.
Seong-hee Chung, a research fellow at the Insurance Research Institute, said, “If you look at the actuarial figure alone, it should be increased by more than 20%, but since it is insurance with 34 million people (excluding group insurance), the increase rate will be decided considering various factors.”
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