The Korea Finance Consumer Federation, a civic financial watchdog, said on Tuesday that consumer’s complaints against life insurance companies in Korea declined last year, but the financial authority should step up supervision on insurance firms.

The KFCF said it analyzed the consumer’s complaint-related records collected by the Financial Supervisory Service and discovered that 41.3 complaints were filed out of 100,000 contracts sealed in 2011, down 8.8 percent from a year earlier.

Mirae Asset Life Insurance saw the biggest decline in complaints, with the ratio plunging 42.1 percent. Woori Aviva Life Insurance, in contrast, suffered a 77.4 percent increase in complaints from its clients, marking the biggest jump.
Ace, PCA, Green Cross, KDB, ING, Allianz and Heungkuk received more client complaints than the average last year, demonstrating that some of the policies were not satisfactory or problematic compared with the industry standard.

Complaints from clients are widely used as a yardstick for measuring how insurers make sure their products are explained and marketed, especially concerning fine details that might lead to consumer dissatisfaction or cancellation.

The KFCF said the majority of life insurers in the group with the poor record in client complaints also receive lower user ratings.

In the non-life insurance sector in Korea, user satisfaction slightly worsened last year, as the number of complaints edged up 0.8 percent from a year earlier.

Lotte Insurance led the pack with a 21.7 percent decrease of complaints from clients last year, but the number of complaints itself remained at high.

Hyundai Hicar witnessed a 44.2 percent increase in client complaints last year, suggesting that the company specializing auto insurance products failed to serve its clients properly.

The majority of non-life insurers received a flurry of complaints and protests from dissatisfied consumers.

The KFCF said some of the insurers doing business in Korea are not up to the consumer’s expectations in many respects, resulting in complaints and cancellations.

“Consumers should be aware that certain companies tend to generate more complaints from clients, and the financial authority should strengthen supervision on insurers,” it said.

By Yang Sung-jin (insight@heraldcorp.com)