Indemnity Health Insurance Payouts Near 17 Trillion Won, Setting All-Time High... Non-Reimbursed Benefits Reach 9.7 Trillion Won

Insurance Payouts Up 11.4% Year-On-Year
Manual Therapy and Non-Reimbursed Injection Claims Reach 3.7 Trillion Won
Loss Ratio Hits 101%, Widening Deficit and Increasing Pressure for Premium Hikes

Last year, payouts for indemnity health insurance approached 17 trillion won, marking an all-time high. Notably, non-reimbursed (non-covered) insurance claims amounted to 9.7 trillion won, accounting for 57% of the total and driving up the loss ratio for indemnity insurance.

According to the "2025 Indemnity Health Insurance Business Performance (Provisional)" report released by the Financial Supervisory Service on June 3, indemnity insurance payouts last year reached 17 trillion won—a rise of 11.4% from the previous year's 15.2 trillion won. Of this, insurance claims related to reimbursed (covered) medical services totaled 7.3 trillion won, while non-reimbursed claims amounted to 9.7 trillion won.

Among non-reimbursed treatments, insurance claims for musculoskeletal disorders—which include manual therapy—reached 2.7 trillion won, representing the largest share. This amount exceeded the claims related to cancer, brain, and cardiovascular diseases, which stood at 2.6 trillion won. Insurance payouts for outpatient non-reimbursed injections, including nutritional supplements, also nearly reached 1 trillion won.

Payouts for non-reimbursed treatments involving new medical technologies also rose significantly. Insurance claims for robotic surgery surged by 72.4% compared to the previous year, while claims for prostate artery embolization and HIFU (High-Intensity Focused Ultrasound) procedures increased by 64.6% and 46.0%, respectively.

The loss ratio for indemnity insurance deteriorated once again. Last year, the incurred loss ratio stood at 101.0%, up 1.7 percentage points from 99.3% recorded the previous year. This far exceeds the 85% breakeven point generally recognized by the insurance industry. Consequently, the underwriting loss for indemnity insurance expanded to 1.87 trillion won, a 15.6% increase compared to the previous year's 1.62 trillion won deficit. Underwriting loss is calculated by subtracting incurred losses and actual operating expenses from premium income.

By generation of policyholders, older indemnity plans with lower out-of-pocket payments saw the largest claim amounts. The average annual payout per policy was highest for first-generation plans at 740,000 won, followed by 490,000 won for second-generation, 360,000 won for third-generation, and 290,000 won for fourth-generation plans. Actual non-reimbursed treatment usage for first-generation policyholders was also double that of fourth-generation policyholders, at 440,000 won compared to 210,000 won.

By type of medical institution, clinics accounted for the highest share of insurance payouts at 32.0%, followed by hospitals (21.8%), general hospitals (17.6%), and tertiary general hospitals (15.0%). In particular, clinics (37.1%) and hospitals (26.9%) together made up 64.0% of all non-reimbursed insurance claims.

The Financial Supervisory Service believes that the increase in some high-cost non-reimbursed treatments is a major factor behind the worsening loss ratio. In response, the agency plans to steadily implement the introduction of optional discount riders, contract conversion discounts, and the transition of fourth-generation policyholders, while strengthening oversight to reduce excessive non-reimbursed treatments and insurance claim leakage.

A representative from the Financial Supervisory Service stated, "The worsening loss ratio not only creates grounds for further premium increases in the future but also raises concerns about consumer harm, such as an increase in disputes. We will continue efforts to curb excessive utilization of non-reimbursed services in collaboration with health authorities and other relevant agencies."

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