A photo, provided by Yonhap News TV, of care service providers (Yonhap)
SEOUL, April 25, (Korea Bizwire) — South Korea’s leading non-life insurers are scaling back coverage for caregiver expense riders as soaring loss ratios threaten profitability.
On April 24, 2025, industry officials confirmed that companies including Samsung Fire & Marine and Meritz Fire & Marine have reduced the daily coverage limit for caregiver expenses tied to adult hospitalization.
Samsung Fire previously allowed policyholders paying over 30,000 won in premiums to claim up to 200,000 won per day for caregiver costs. As of this week, that cap has been halved to 100,000 won. Meritz followed suit, trimming its maximum daily benefit from 200,000 won to 150,000 won.
Other major insurers—including DB Insurance, Hyundai Marine & Fire, and KB Insurance—are also reviewing cuts to adult caregiver rider limits.
At the same time, several companies, including Samsung Fire, Hyundai Marine, and KB Insurance, have already reduced the cap for children under 15 to 50,000 won per day, down from 150,000 won. Meritz had implemented a similar limit for children starting last year.
The move comes as insurers grapple with mounting losses tied to caregiver riders, which pay fixed amounts for hiring a caregiver during hospitalization.
After a wave of competition in 2024 pushed coverage limits as high as 200,000 won per day, insurers began reporting sharp increases in abuse and fraudulent claims—cases in which caregivers were hired unnecessarily or costs were exaggerated.
Loss ratios have since surged, with some companies reporting over 600% loss rates on child caregiver policies and 300–400% on adult equivalents.
“In a saturated insurance market, the caregiver rider was a useful sales tool,” said one industry insider. “But the rapid deterioration in loss ratios forced companies to reduce exposure for risk management.”
The growing issue has prompted regulatory attention. The Financial Supervisory Service (FSS) recently issued guidance to remind policyholders that reimbursement requires clear proof of payment and services rendered.
If receipts or documentation are incomplete, insurers may request additional evidence, such as caregiver contracts or daily logs. Caregiver benefits are not payable if care is provided through Korea’s integrated nursing care services, where hospitals supply in-house nursing staff.
As scrutiny mounts, insurers are expected to tighten both underwriting standards and verification requirements for caregiver-related products.
Ashley Song (ashley@koreabizwire.com)
