[Becoming an Insurance Insider] 4th Generation Silseun Released but... Why It Can't Cause a Storm

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[Asia Economy Reporter Oh Hyungil] "It was an expected result."

It has been revealed that the sales volume of the 4th generation actual expense medical insurance, introduced since last month, has not significantly increased. The insurance industry says this was already anticipated and there is nothing surprising about it.

With more than 39 million people, accounting for 75% of the entire population, already subscribed to actual expense insurance, there are not many consumers newly subscribing to the new actual expense insurance, and demand has concentrated on the 3rd generation actual expense insurance.

According to the insurance industry, the number of new actual expense insurance sales by major non-life insurers (Samsung, Hyundai, DB, KB, Meritz) in July was 52,108 cases. This is a 63.2% decrease compared to the same month last year.

Other life and non-life insurers also reported a decrease in actual expense insurance sales in July compared to the same period last year.

The 4th generation actual expense insurance, aside from having lower premiums than existing products, lacks particular appeal. It has long been predicted that existing subscribers would not switch because premiums are discounted or surcharged based on medical usage for non-reimbursed services.

The 4th generation actual expense insurance separates non-reimbursed treatments as a special coverage item and adjusts premiums based on the amount of non-reimbursed medical usage. If a subscriber receives many non-reimbursed treatments, the premium can increase up to four times, while those who use hospitals less receive premium discounts, which is interpreted as disadvantageous to consumers compared to existing products.

The conversion of existing actual expense insurance subscribers to the 4th generation actual expense insurance remains minimal. Looking at the number of actual expense insurance sales last month by the top five non-life insurers (Samsung, Hyundai, DB, KB, Meritz), the number of contracts switching from 1st generation to 4th generation actual expense insurance was 5,678, from 2nd generation to 4th generation was 4,545, and from 3rd generation to 4th generation was 276.

However, if premiums for existing actual expense insurance continue to rise, it is expected that there will be a long-term movement to switch to the 4th generation. The 3rd generation actual expense insurance also had sluggish sales at the initial stage but secured a market share of 25% as of the first half of this year.