Number of Denied Indemnity Insurance Claims Surges 22% in One Year... "Blocking Non-Reimbursable Medical Shopping Is Key for 5th Generation"

Usually Up 10%, But Last Year the Increase Doubled
Over 35,000 Cases Recorded in the Second Half of 2025
Tackling the Root Cause: "Medical Shopping" for Non-Reimbursable Treatments
Curbing Fraud Beyond Individuals—Medical Institutions Under Scrutiny

The number of denied indemnity health insurance claims in the non-life insurance industry surged by over 22% in the second half of last year compared to the same period a year earlier. This increase is nearly double the typical annual growth rate of around 10% seen in previous years. The sharp rise is attributed to insurance companies tightening their claim review processes in response to excessive non-reimbursable medical treatments. As a result, there are growing calls for the urgent implementation of institutional measures to accurately detect excessive insurance claims for non-reimbursable items—the root cause—in order to reduce disputes over denied claims and to ensure the successful adoption of the fifth-generation indemnity health insurance system.

An image depicting a financial consumer filing a claim for actual loss insurance through an application. The Asia Business Daily database

Number of Denied Claims, Usually Up 10%, Jumped 22.1% Last Year

According to the General Insurance Association of Korea on May 2, the number of denied indemnity health insurance claims in the non-life insurance sector totaled 35,762 in the second half of last year. This represents a 22.1% increase compared to the 29,289 cases in the second half of 2024. After briefly declining from 37,915 in the second half of 2023 to 29,289 in the second half of 2024, the figure surged again last year.

The upward trend was even more pronounced when broken down by company. All six major non-life insurers—Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Hanwha General Insurance—recorded increases in the number of denied claims. Compared to the second half of 2024, DB Insurance saw the highest year-on-year growth at 46.9%, followed by Hanwha General Insurance (31.8%), Hyundai Marine & Fire Insurance (26.4%), KB Insurance (21.8%), Meritz Fire & Marine Insurance (5.2%), and Samsung Fire & Marine Insurance (4.4%). In terms of the absolute number of denied claims, Hyundai Marine & Fire Insurance led with 10,045 cases, followed by DB Insurance with 8,119 cases and Samsung Fire & Marine Insurance with 5,310 cases.

The industry and regulatory authorities cite several factors behind the sharp increase in insurance claims for non-reimbursable items last year: an uptick in claims for injections not covered by indemnity insurance, such as supplements, vitamins, and preventive shots; enhanced user convenience due to improvements in the "Silson24" application; and strengthened oversight by the Financial Supervisory Service in response to fraudulent claims involving devices like Maunjaro and manipulative therapy.

The industry is paying close attention to trends in denied claims because the success of the fifth-generation indemnity health insurance system, set to be announced in early May, hinges on eradicating excessive claims for non-reimbursable items. While it is difficult to attribute the recent increase in denials solely to so-called "medical shopping" for non-reimbursable treatments, there is a growing sense of urgency that failing to screen out fraudulent claims could lead to a surge in disputes over denied claims and force premium hikes for honest policyholders in the future.

An industry insider commented, "As we approach the revision of the fifth-generation indemnity health insurance, the role of the authorities in fundamentally resolving the controversy over denied claims has become all the more important." The insider added, "Given the simplified claims process, it is essential to have institutional mechanisms in place to meticulously filter out medical shopping for non-reimbursable treatments and fraudulent claims."

Urgent Need for a Precision Monitoring System for Medical Institutions and Broker Networks

In particular, the industry believes that the success of the fifth-generation indemnity health insurance system depends on how effectively it can regulate not only individual misconduct, but also sophisticated fraudulent activities by medical institutions and the manipulation of medical consultations. Amid a rise in livelihood-driven insurance fraud during the recent economic downturn, there is a growing call for a precision monitoring system targeting both excessive non-reimbursable claims—especially at primary care facilities—and broker networks.

Another industry official pointed out, "If health and financial authorities had effectively rooted out medical shopping for non-reimbursable treatments, there would have been no need to launch a new version of the indemnity health insurance every time after the fourth generation." The official stressed, "We need to move beyond merely managing certain non-reimbursable items separately as 'managed benefits' and instead establish a comprehensive interagency collaboration system that can actually control the actions of medical institutions and brokers."

A Financial Supervisory Service official said, "We are guiding individual insurers to ensure that there are no cases where claims are denied without valid reasons, aiming to reduce disputes over insurance complaints." The official added, "As the fifth-generation indemnity health insurance increases the proportion of co-payments for non-reimbursable items, we expect this to help mitigate premium increases for regular consumers caused by unjust claims."

This content was produced with the assistance of AI translation services.