Life insurers exceed 11.8 trillion
Low interest rates and lack of active promotion
Rep. Hwang points out "Structure favors insurers only"
Last year, the amount of unclaimed insurance payouts by policyholders exceeded 12 trillion won. In particular, it was found that insurance companies did not actively inform customers with unclaimed insurance payouts even when they signed up for new insurance policies.
According to data submitted on the 5th by the office of Hwang Unha of the Democratic Party of Korea from the Life Insurance Association and the General Insurance Association, the unclaimed insurance payouts as of last year totaled 12.3573 trillion won. Most of this amount belonged to life insurance companies. Life insurers accounted for 11.8226 trillion won (4,774,122 cases), overwhelmingly surpassing the general insurers' 534.7 billion won (618,350 cases).
By type, for life insurance companies, the breakdown was ▲interim insurance payouts of 8.8915 trillion won (2,187,585 cases) ▲maturity insurance payouts of 2.3484 trillion won (335,668 cases) ▲dormant insurance payouts of 582.7 billion won (2,250,869 cases). For general insurers, maturity insurance payouts were the largest at 318.8 billion won (91,145 cases), followed by dormant insurance payouts of 174.4 billion won (500,952 cases), and interim insurance payouts of 41.4 billion won (26,253 cases).
The company with the largest cumulative unclaimed insurance payouts until last year was Samsung Life Insurance. It alone recorded over 2 trillion won with 2.0649 trillion won across the entire industry. Following were ▲Heungkuk Life Insurance with 1.8302 trillion won ▲Hanwha Life Insurance with 1.7138 trillion won ▲Tongyang Life Insurance with 1.6938 trillion won ▲Shinhan Life Insurance with 1.2462 trillion won ▲Kyobo Life Insurance with 880.9 billion won ▲KDB Life Insurance with 827.4 billion won.
Among general insurers, Samsung Fire & Marine Insurance had the highest amount at 90.1 billion won. Next were ▲DB Insurance with 80.6 billion won ▲Lotte Insurance with 66.4 billion won ▲NH Nonghyup Insurance with 63.6 billion won ▲KB Insurance with 61.5 billion won ▲Hyundai Marine & Fire Insurance with 40.1 billion won.
There are criticisms that insurance companies did not actively inform customers about unclaimed insurance payouts. It was found that some insurers did not inform existing customers with unclaimed payouts at all even when they signed up for new insurance policies. According to Article 662 of the Commercial Act, the right to claim insurance payouts and the right to claim refunds of premiums or reserves expire if not exercised within 3 years, and the right to claim premiums expires if not exercised within 2 years.
Meanwhile, last year, the interim insurance payouts for life insurance were based on an average declared interest rate of 2.25%, maturity insurance payouts were 40 to 50% of the average declared interest rate, and dormant insurance payouts were found to have no interest at all.
Representative Hwang stated, "While insurance sales are aggressive, there are many cases where insurance payouts are withheld for various reasons, causing great dissatisfaction among insurance consumers," adding, "Unclaimed insurance payouts may not be received due to the statute of limitations, and the interest paid is also lower compared to the declared interest rate, creating a disadvantageous structure where only insurance companies benefit if payouts remain unclaimed."
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