Cancelled policies in Korea cost $3.4bn for first nine months of 2016

Persistently worse economic conditions leading more policyholders to cancel their contracts to withdraw cash

Cancelled policies in Korea cost $3.4bn for first nine months of 2016

Insurance News

By Gabriel Olano

More and more South Koreans have cancelled their insurance policies last year due to financial problems amid a persisting economic slowdown for the country’s economy, government data showed.
 
Opposition lawmaker Park Yong-jin cited Financial Supervisory Service (FSS) data that shows insurance policyholders have lost approximately 3.89 trillion (US$3.4 billion) due to cancelled policies in the period spanning January to September 2016.

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Insurers usually refund a portion of the premiums policyholders have already paid in case they cancel their contracts.
 
For the entire year of 2015, financial losses due to policy cancellations amounted to KRW4.85 trillion (US$4.2 billion), a 16% increase from the 2014 figure of KRW4.19 trillion (US$3.6 billion).
 
According to experts, people tend to cancel their insurance policies to gain extra cash in times of economic difficulties.

 
Related stories:
Inter-Korean industrial complex’s shutdown leads to $1.3bn loss
 

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