Many policyholders complain about insurers' claim payments. Now, data has emerged that backs up Kim's assertion. Cases in which insurers improperly denied or underpaid claims and were caught by the Financial Supervisory Service totaled nearly 1,000 over the past five years or so. The amount involved reached 550 million won, prompting calls for regulators to tighten oversight of insurers' claims management and follow-up inspections.
According to data submitted by the FSS to Rep. Park Sung-hoon of the People Power Party, a member of the National Assembly's National Policy Committee, on Sept. 28, the FSS uncovered 961 cases of denied or underpaid insurance claims during its inspections of insurers from 2022 through July this year.
The total amount of denied and underpaid claims came to 548.4 million won. Among non-life insurers, DB Insurance had the largest amount, at 262 million won across 26 cases — the highest of any insurer by value. KB Insurance followed with 97.9 million won (10 cases), AXA General Insurance with 73.8 million won (24 cases) and Meritz Fire & Marine Insurance with 40.5 million won (14 cases). Together, the four accounted for 474.2 million won, or 86.5% of the total.
Life insurers tended to deny or underpay relatively small amounts to a larger number of policyholders. Kyobo Life had 499 cases (32.7 million won) of underpaid accrued interest during the claims payment process, the most of any insurer by number of cases. Tongyang Life (237 cases, 17 million won), Shinhan Life (68 cases, 12.9 million won), MetLife Korea (55 cases, 7.1 million won) and AIA Life (28 cases, 4.5 million won) were also cited by regulators for denials and underpayments.
"It cannot keep happening that insurers collect premiums without fail from consumers while failing to pay, or underpaying, the claims they owe," Park said. "They must strengthen internal controls and follow-up inspections so that nothing is omitted to consumers' disadvantage in the calculation and payment of claims."
