According to the Life and General Insurance Association of Korea, premiums for the actual expense health insurance scheme, with 40m subscribers, is set to increase by 7.8% in 2026.
A report in the Chosun Daily states that the fourth-generation actual expense insurance, which will experience the largest rate hike next year, and will see an increase in the 20% range. The third-generation will rise in the 16% range, the second-generation in the 5% range, and the first-generation in the 3% range. Actual expense insurance is categorised into four generations based on subscription periods. The first-generation was sold until September 2009, the second until March 2017, the third until June 2021, and the fourth is currently being sold.
Earlier subscribers enjoy broader coverage but pay higher premiums. For men in their 40s, the average monthly premium for first-generation actual expense insurance this year is KRW54,000, the second-generation KRW34,000, the third-generation KRW23,000, and the fourth-generation KRW15,000.
The insurance industry believes that premium hikes are unavoidable due to excessive non-covered medical treatments and accumulated losses, with loss ratio surpassing 100%. As of the third quarter of 2025, the loss ratio for fourth-generation actual expense insurance reached 147.9%. The third-generation stood at 138.8%, the first at 113.2%, and the second at 112.6%, with all generations in chronic deficit.
South Korea’s five major insurers—Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Meritz Fire & Marine Insurance-–have reported total payout for actual expense insurance in the first three quarters of 2025 at KRW8.4848tr, a 13.1% increase from the same period last year. Orthopedics accounted for 22.3% of total payouts, with non-covered items like manual therapy and extracorporeal shockwave therapy cited as key factors driving the loss ratio.