Amid Soaring Indemnity Insurance Premiums, Some Insurers Reduce Comprehensive Insurance Premiums

[Asia Economy Reporter Kim Jin-ho] While the premiums for actual loss medical insurance have risen significantly this year, some insurers are attracting attention by lowering premiums for comprehensive insurance.

According to the insurance industry on the 16th, DB Insurance and NH Insurance confirmed that they raised the expected interest rate by 0.25 percentage points from the previous rate for their major sales products, comprehensive insurance and child insurance, earlier this month.

The expected interest rate is the interest rate (discount rate) necessary to calculate the monthly premium to be charged in order to pay the contracted insurance benefits to the policyholder. When the expected interest rate rises, the same insurance benefits can be received with lower premiums, but conversely, if it falls, the premium burden increases.

Generally, lowering the expected interest rate by 0.25 percentage points reduces premiums by 5-7% depending on the product.

Following the reduction, the currently most popular "No Surrender 50% Refund Type" comprehensive insurance shows that the industry average premium for a 50-year-old male is 83,000 KRW, with DB Insurance offering the lowest at 77,000 KRW. NH Insurance was the next lowest at 80,000 KRW.

For child insurance, in the case of a 10-year-old boy, the industry average is 27,000 KRW, while DB Insurance lowered it to 22,000 KRW, the lowest in the industry.

Meanwhile, according to the Life Insurance Association and the General Insurance Association, premiums for the "1st generation" old actual loss insurance (sold until September 2009) and the "2nd generation" standardized actual loss insurance (sold from October 2009 to March 2017) will increase by an average of 16% this year.