猫咪社区app Korea CEO Michael Shin tells Asia Insurance Review that while South Korea’s critical illness market is among the world’s most developed, insurers must pivot from price?driven competition to holistic, longevity?focused solutions to close protection gaps in a rapidly aging society.
South Korea’s mature critical illness insurance market faces evolving gaps and opportunities, writes Michael Shin, CEO of 猫咪社区app Korea, in this .
South Korea has a very mature CI insurance market with more than 1 million new CI policies sold on average each year.
The health insurance coverage rate in South Korea in 2024 was 64.9%. The insurance out-of-pocket (OOP) expenses are estimated to be KRW90tn (USD$63 billion). The statutory OOP rate was around 19.3% in 2024 and 19.9% in 2023.
Said Mr. Shin, “South Korea’s critical-disease protection gap is closer to an adequacy gap rather than a pure no-insurance gap. OOP expenses’ share of healthcare spending is still significantly large.”
Mr. Shin said, “The top three causes of death in South Korea – cancer, heart disease, and pneumonia – have consistently accounted for approximately 40% of all deaths over the past five years and have steadily risen over the past five years. In 2024, their combined share rose to 42.6%, marking an increase of 1.7 percentage points compared to the previous year.”
Among the top 10 causes of death, Cancer, pneumonia, hypertensive diseases, and septicaemia have exhibited persistent increases year after year. Malignant neoplasms, cardiac diseases, pneumonia and cerebrovascular diseases were the top four critical diseases during the period 2020-2024.
“The health insurance coverage rate of these four major diseases decreased year on year especially cancer, where the coverage rate of 75% has reduced by 1.2% compared to the previous year.
While national health insurance (NHI) provides a foundational level of coverage, many services remain uninsured or only partially covered, including certain treatments, medications, and supportive care,” said Mr. Shin.
CI insurance is intended to help address these risks through lump sum payouts; however, coverage is often insufficient to fully bridge gaps related to prolonged treatment, long term care, or loss of employment and independence following a critical illness. Although many individuals rely on private supplemental insurance to enhance their protection, gaps remain due to limitations in coverage scope and uneven penetration.
“Even where statutory co-payments fall below the established co-payment ceiling, these costs are not always fully reimbursed through private indemnity insurance, leaving individuals exposed to additional expenses. Beyond direct medical costs, indirect financial impacts – such as lost income during treatment or recovery, long-term care needs, and broader lifestyle disruptions – can be substantial.”
Speaking about how CI insurance and research on treatments are developing, Mr. Shin said, “Both research and product development related to critical diseases are actively evolving. On the research side, current efforts are focused on understanding how medical advances – such as improved treatments, new pharmaceuticals, and early-diagnostic capabilities – will affect long-term claims experience and the sustainability of insurance coverage.
“This research helps insurers assess how changing disease trajectories and treatment patterns may alter morbidity, recovery outcomes, and cost profiles over time.”
“From a product perspective, new offerings are increasingly designed to reflect these medical developments. Some products are expanding coverage to include emerging diseases as well as medically necessary items and services that are not fully covered under the NHI system. This includes innovative cancer treatments, novel pharmaceuticals such as GLP-1 therapies, and advanced preventive or early-detection diagnostic tests.”
“Insurers are also introducing benefits that help offset NHI co-payment requirements, addressing OOP expenses that patients may still face despite public coverage,” he said.
Mr. Shin said, “Overall, the importance of designing affordable, accessible products that align with the evolving health risks and financial concerns of middle-aged and elderly consumers as they move through later life stages cannot be overemphasised.”
Speaking about the proactive approach taken by the government and the insurance industry to address the growing dementia challenge in the country, Mr. Shin said, “South Korea began in this area with the launch of the National Dementia Responsibility System in September 2017. This initiative significantly expanded the country’s dementia support infrastructure, including community assistance centres, long term care services, and enhanced medical support."
“In parallel, the private insurance market evolved to complement these public efforts. Dementia insurance products broadened beyond coverage limited to severe dementia to include moderate (CDR Level 2) and mild dementia (CDR Level 1), while also introducing long-term annuity options for severe dementia.”
“Insurers further refined their offerings through more tailored solutions, incorporating diversified riders and value added services to better match individual needs. These developments have been well received by the market, with approximately 8m people – around 15.5% of South Korea’s total population – covered by dementia and care insurance as of the end of 2022.”
He said, “The success of this market reflects a clear alignment between product design and demographic trends, particularly the needs of middle aged and elderly segments in an ageing society. It also highlights a customer-focused approach that adapts coverage as longevity increases, alongside effective leverage of government policies that have raised public awareness and encouraged broader engagement with dementia protection solutions."
Speaking about the next phase of development for CI coverage, Mr. Shin said, “It calls for a strategic shift away from feature-driven competition and price wars toward holistic senior solutions that support long term sustainability."
“Rather than competing solely on standalone insurance products, insurers are increasingly expected to package protection with services that address the full spectrum of seniors’ needs over time, including care support, disease management, health promotion, caregiver assistance, and retirement lifestyle services.”
“This approach requires a rebalancing away from aggressive pricing and rapid feature proliferation. The focus should now be toward value creation through more treatment-based, need-oriented offerings.”
He said, “Ultimately, under this approach, success will depend on building a broader senior ecosystem business model, one that integrates insurance with retirement asset management and care navigation support. This will allow insurers to remain relevant and trusted partners as South Korea progresses further into a super aged society."
“Insurers are strengthening existing modular benefit structures, with a greater focus on treatment-based needs and the ability to integrate preventive care options. Together, these research and product developments reflect a shift toward more comprehensive, medically aligned CI coverage that responds to both emerging health risks and gaps in public healthcare reimbursement.”
Insurers are also examining their role across the full lifespan and moving away from reactive, illness triggered coverage toward more proactive planning. This includes embedding prevention and early intervention support into products, helping individuals prepare for health and financial risks well before illness occurs.
Mr. Shin said, “They are placing greater emphasis on sustained public education to raise awareness of ageing, health management, and retirement readiness, recognising that informed consumers are better positioned to engage in long term planning."
“Another key challenge lies in expanding insurance penetration among younger generations. With fewer new entrants into the workforce, insurers are looking to motivate younger consumers to begin protecting their health and building retirement resilience early in their careers, linking early engagement to stronger and more sustainable long term coverage.”
He said, “This shift reflects a broader reframing of longevity – not simply as living longer, but as living longer and living well – which has important implications for how risks are priced, how products are designed, and how customer needs evolve over time.”
Contact us to explore how insurers can address growing adequacy gaps in South Korea’s critical illness market through medically aligned, treatment?based solutions.
Chief Executive Officer, 猫咪社区app Korea; Senior Vice President, Chief Marketing Officer, Asia Pacific