Insurance fraud reaches record high in South Korea

Regulator turns its attention to stopping high-profile, organised insurance scams

Insurance News

By Gabriel Olano

Despite a crackdown, fraudulent insurance claims have reached a record high in South Korea for the first half of 2016, according to the Financial Supervisory Service (FSS), the country’s financial regulatory agency.
For the first six months of the year insurance fraud cases reached a total of US$314 million, up 12.1% compared to the same period in 2015.
However, the number of fraudsters decreased by 2.2%, with only 40,054 offenders reported, according to the Yonhap News Agency.
The FSS said that it has intensified its efforts in foiling high-profile and organised insurance scams, several of which involved expensive imported vehicles. Scams with hospital staff as accomplices were also stopped.
Non-life insurance fraud was the most dominant form, making up 86.5% of cases and worth US$271.5 million. The remaining 13.5% of cases were for life insurance fraud.
The value of insurance claims regarding false hospitalization, known as “nylon patients” in Korea, increased for January to June of this year. The amount of claims, usually linked to staged or minor car accidents, rose to US$44.5 million, compared to US$38.2 billion for the first half of 2015.

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