SEOUL, Sept. 25 (Korea Bizwire) –A few South Korean life insurance companies still have misselling rates reaching nearly 1 percent regarding their insurance policies. Misselling is a sales practice in which a financial product or service is deliberately misrepresented or a customer is misled pertaining to certain information regarding the product.
The practice has become a prominent issue because of the continued harm inflicted on senior citizens and young adults who subscribe to insurance policies without knowing the extent of their coverage. According to data submitted to the National Policy Committee by the Financial Supervisory Service, Hyundai Life recorded the highest misselling rate among the 25 local insurance companies.
The data is based on information recorded in 2017. Hyundai’s Life’s misselling rate was 0.93 percent, which was three times that of Kyobo Life Insurance (0.33 percent) and nearly eight times that of Samsung Life Insurance (0.12 percent). Other insurance companies that had high misselling rates were KDB Life Insurance (0.81 percent), PCA Life Insurance (0.75 percent), Heungkuk Life (0.68 percent), and KB Life Insurance (0.62 percent). Companies that offered commercial insurance policies, meanwhile, boasted generally lower misselling rates.
Of the 14 commercial insurance companies, ACE had the highest misselling rate of 0.44 percent, followed by Samsung Fire & Marine Insurance (0.17 percent), AIG (0.16 percent), and DB Insurance (0.15 percent). Lawmaker Kim Seong-won, who has a seat on the National Policy Committee, said that the sales practice of misselling must be rooted out. “A measure to increase the responsibility by insurance firms must be put into place,” said Kim.
Kevin Lee (email@example.com)