In June, before the peak of summer heat, a young man in his early thirties filled a quiet bar in Dapsimni-dong, Dongdaemun-gu, with his voice. He spoke with the pride typical of young professionals discussing their jobs.
His story was intriguing. He boasted about catching an 'insurance fraudster' and receiving a reward from his company. Although his account was exaggerated, he confidently displayed photos to prove he was a valuable member of society.
Curious about a civilian catching an insurance fraudster, I listened closely. The photo he showed was of a chart board hanging in his office. He claimed to have caught 13 fraudsters that month alone.
The issue arose during a subsequent phone call with an elderly man. The young man said, "Sir, this is how we help you get your money. If you have questions, it’s the senior hospital that suggested your case needs further review, and we are just following their advice."
After hanging up, he grimaced and remarked, "People are such a nuisance at night; no wonder they get cancer," before taking another drink.
Using the business card he left on the table, I investigated further. It belonged to a claims adjustment company affiliated with Company M. I asked a contact in the industry how claims adjusters catch insurance fraudsters.
They explained that 'insurance fraudster' is a colloquial term. Only a few qualified adjusters can register as formal claims adjusters. The actual work is often handled by teams of young professionals in their twenties and thirties who are contracted by large insurance companies.
When a claim exceeds a certain amount due to illness or death, these adjusters immediately contact doctors at affiliated hospitals. A simple response indicating that the cause of surgery, treatment, or death requires 'further review' is sufficient. This makes entertaining doctors at senior hospitals a necessary part of their job.
From this point, the strategy is to delay payments. Although legal interest accrues, it doesn’t matter. If payments are postponed for six months or a year, it is the policyholder, not the insurance company, who suffers from mounting medical bills. When the policyholder is in a tight spot, they propose a settlement. For instance, if the rightful claim is 50 million won, they might offer 10 million won to close the case. Company M explains that the amount of insurance payment can be adjusted through negotiation if the policyholder desires.
As a result, the insurance company saves 40 million won in payouts. A portion of this amount is given to the claims adjustment company as an incentive. An industry insider noted that a claims adjuster with two years of experience could earn an incentive of 3 million won per month. They refer to this practice as 'catching insurance fraudsters.'
It is not easy for policyholders to counter this. Typically, they hire a separate claims adjuster under a contract that pays a commission of about 20% of the total insurance payout.
I contacted another company affiliated with Company M and asked, "Do you receive incentives for reducing insurance payouts?" An employee who introduced themselves as being in their third month said they had not received any yet, but team leaders rely on incentives as a primary source of income.
With recent advancements in medical technology, such as robotic surgeries, insurance payouts have increased, prompting insurance companies to intensify their efforts in 'catching insurance fraudsters,' according to a representative from one insurance firm.
Consider an elderly person who has paid insurance premiums for years or even decades, not wanting to burden their family. After the self-proclaimed fraud-catching efforts, they may be left with only a small amount of money and a fruit basket. As long as the structure that rewards not paying out insurance remains, customers who trust and contract with insurance companies may find themselves labeled as the fraudsters they are trying to avoid.
* This article has been translated by AI.
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