I signed up because the insurance premium was cheap... I can't believe this.

Starting this month, the financial authorities applied guidelines for assumed cancellation rates for non-cancellable and low-cancellation insurance, leading major property and casualty insurers to uniformly raise premiums for these products.

Non-cancellable and cancellable insurance products attracted consumers' interest because they have little to no refund upon early termination or very small refunds, but their premiums are low.

However, when it was pointed out that insurance companies had set their cancellation rates too optimistically to inflate their performance, financial authorities established guidelines to correct this. As a result, insurance premium increases became unavoidable, according to industry sources.

The rate of increase varied depending on the insurance company.

Hyundai Marine & Fire Insurance increased the premiums for its flagship products by an average of 7.8%, Samsung Fire & Marine Insurance by 6.3%, KB Insurance by 5.0%, and DB Insurance by 4.1%. Some products saw increases exceeding 30%.

 

For men in their 40s, the combined insurance premium increased by 32.7% compared to the previous month with KB Insurance, and Samsung Fire & Marine Insurance and DB Insurance also recorded double-digit rate increases.

As news of the insurance premium surge spread, consumers reacted with comments such as "Then why did you say it was cheap?"

An industry insider in the insurance sector explained, "Insurance companies that previously estimated cancellation rates too optimistically were significantly affected by this adjustment," and added, "Meanwhile, companies that estimated conservatively experienced smaller increases or, in some cases, saw premiums decrease."

In the GA (corporate insurance agency) industry, it is expected that price competition among products will intensify as insurance premiums serve as a key factor in insurance selection.

 

Last year, insurance companies achieved their highest-ever performance, but their risk-based capital ratio (RBC) actually declined significantly.

The solvency ratios of major insurance companies such as Samsung Life, Hanwha Life, and KB Insurance have all declined, with some small and medium-sized insurers barely exceeding or falling below the 150% level recommended by financial authorities.

This phenomenon is analyzed to be due to the reduction in available capital as a result of the reflection of the no-penalty insurance cancellation guidelines.

The decline in market interest rates and the reduction of insurance liability discount rates also became factors that put pressure on the financial soundness of insurance companies.

Insurance companies are raising capital through the issuance of subordinated bonds and capital securities. Last year alone, capital securities worth 8.6 trillion won were issued, and issuance is expected to continue this year.

 

As living expenses increase due to high prices and high interest rates, consumers who are unable to maintain their insurance policies are rapidly increasing.

In a survey conducted by Samsung Life Insurance among its agents, the biggest reason for policy cancellations was identified as 'financial burden.'

Especially, no-deductible products were previously sold by emphasizing their "affordable premiums," but this insurance premium increase has instead resulted in increasing household burdens.

Insurance companies explain that it was an unavoidable measure to strengthen financial stability, but consumers argue that they have had to bear additional costs without sufficient guidance.

Experts warn that a complete overhaul of the insurance premium calculation methods and product structures is necessary, and if consumer trust is not restored, the market itself could contract.

 

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I'm trying to save even a small amount by adjusting my insurance and getting another consultation...

 

When they arbitrarily raise insurance premiums and demand payment... the unfortunate consumers who have to pay.

 

In the end, only the insurance company benefits...