Travel Insurance Sign-Ups Up 8%... But Claim Denials Soar 92%

Flight Delay Claim Denial Rate Doubles in Three Years

As the number of overseas travelers increases, the traveler insurance market is expanding. However, the number of denied insurance claims has been rising much more rapidly than the number of claims paid. In particular, the denial rate for coverages related to flight delays or cancellations, and baggage delay or loss, has been notably high, with substantial differences depending on the insurer.

Myungsoo Son, member of the Democratic Party of Korea. Office of Mr. Son

According to data on overseas traveler insurance from five non-life insurance companies (Meritz Fire & Marine Insurance, Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and DB Insurance) submitted by Myungsoo Son, member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, and provided by the Financial Supervisory Service, the number of insurance claims increased by 8.2%, from 124,427 cases in 2023 to 134,636 cases in the previous year.

In contrast, the number of denied claims surged by 92% during the same period, from 2,247 to 4,306 cases. The denial rate, as a percentage of total claims, also rose from 1.81% in 2023 to 3.20% in the previous year.

The denial rate for flight delay and cancellation coverage nearly doubled, reaching 8.36% last year compared to 4.24% in 2023. While the number of claims filed for this coverage increased by 78.3%, from 12,277 to 21,892 over the same period, the number of denied claims jumped by 251.9%, from 520 to 1,830 cases.

The denial rate was even higher for checked baggage delay or loss. Out of 2,299 claims filed last year, 375 were denied, resulting in a denial rate of 16.31%. This figure has more than doubled in three years from 6.11% in 2023.

There were also significant differences between insurance companies. From January to July of this year, the denial rate for flight delay and cancellation coverage was highest at DB Insurance (15.14%), followed by Samsung Fire & Marine Insurance (5.63%), Hyundai Marine & Fire Insurance (4.43%), KB Insurance (2.53%), and Meritz Fire & Marine Insurance (1.30%). The difference between the highest and lowest insurers was approximately 11.6 times.

Assemblyman Son stated, “Because traveler insurance can be purchased easily, many consumers do not carefully review the terms of coverage.” He added, “As the traveler insurance market expands, there should be enhanced information provision so that consumers can easily compare the coverage conditions and actual payment or denial status by insurer.” He further emphasized, “Financial authorities also need to examine the reasons for the differences in denial rates between insurers and ensure that key coverage and exclusion clauses are clearly disclosed at the time of enrollment.”

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