75% of Insurance Lawsuits Won by Insurers... "A Tilted Playing Field"

Min Byung-duk MP "Information Imbalance Between Life Insurance Companies and Consumers"

Every year, around 300 lawsuits related to life insurance occur, but most of these cases end with a complete victory for the life insurance companies.

According to data submitted by the Financial Supervisory Service to Min Byung-duk (Democratic Party, Anyang Dongan-gap), a member of the National Assembly's Political Affairs Committee, the full victory rate of life insurance companies in lawsuits from 2019 to 2023 hovered around 75% annually, overwhelmingly surpassing the full loss rate. This means that even when consumers file lawsuits claiming unfairness in the insurance payout process, in three out of four cases, the insurance companies' arguments are fully accepted.

75% of Insurance Lawsuits Won by Insurers... "A Tilted Playing Field"

Min Byung-deok, member of the Democratic Party of Korea. [Photo by Min Byung-deok's office]

Regarding these results, some argue that due to the information asymmetry between life insurance companies and consumers, consumers have to fight on a "tilted playing field" in insurance-related disputes. Since insurance companies hold most of the complex procedures and various information that form the basis for determining facts from calculating to paying insurance benefits, it is said that it is as difficult as "picking stars from the sky" for consumers to assert their claims.

It was also found that the majority of life insurance lawsuits over the past five years were accounted for by the so-called "Big 3" life insurers: Samsung Life Insurance, Hanwha Life Insurance, and Kyobo Life Insurance. In 2019, the combined number of lawsuits from these three companies (136 cases) accounted for about 44% of all lawsuits, and last year, this proportion increased to 53% (147 cases). Min Byung-duk said, "Considering that the life insurance market is a giant market with an annual payout scale of 95 trillion won, disputes between life insurance companies and consumers are somewhat natural. However, the fact that the 'full victory rate' of life insurance companies in most of these lawsuits is around 75%, not just 'partial victories,' raises concerns about whether disputes between life insurance companies and consumers are taking place under conditions overwhelmingly favorable to the life insurance companies."