According to data from the General Insurance Association of Korea, Thursday, the number of consumer complaints filed against Hyundai Marine stood at 5,304 throughout last year, up 10.4 percent from the previous year.
The sharp increase is compared to its larger rivals of business bellwether Samsung Fire & Marine Insurance and No. 2 player Dongbu Insurance, which saw their complaints rising 5.61 percent and 0.8 percent last year, respectively.
In terms of the number of complaints per 100,000 policies, Hyundai Marine managed to lower the number from 10.92 in the second quarter to 7.81 in the fourth quarter. However, compared to Dongbu, which decreased the number from 8.06 to 7.27 during the same period, Hyundai Marine still lags behind. During the same period, Samsung Fire lowered the number from 9.33 to 8.54.
According to the data, most of Hyundai Marine’s complaints were about payouts. In the fourth quarter, 646 out of 1,106 complaints were about compensation or payouts, while 206 were about solicitation and 217 were about maintenance of policies.
Hyundai Marine, which is headed by Chairman Chung Mong-yoon, particularly struggles when it comes to payouts to customers.
A separate tally from the association shows that Hyundai Marine refused 2.67 percent of payment claims in the first half of last year, which is the highest among non-life insurers registered to the association. The industry average was 1.64 percent.
Hyundai Marine policyholders are not happy with those figures.
“Two important factors consumers should pay attention to are the ratio of incomplete sales and the denial ratio,” an insurance firm official said. “Consumers should avoid an insurer, which has high numbers in these two areas.”
In contrast, Hyundai Marine boasts a solid financial performance, which critics say the firm chalked up at the expenses of its clients.
In its regulatory filing, the company said it posted 541.76 billion won ($468.2 million) in operating profit last year, up 84 percent from a year earlier. Its net profit also surged to 399.71 billion won, up 96.6 percent from 2015.
Buoyed by the handsome bottom line, Hyundai Marine employees will likely get a significant amount of incentives.
“The two pillars of financial regulations are capital prudence and consumer protection,” an industry insider said asking not to be named. “It seems that Hyundai Marine draws criticism that it seeks the former while paying little attention to the latter.”
To the criticism, a Hyundai Marine official said “the denial ratio does not necessarily mean that the company is not paying what it has to.”
“The ratio also includes invalid claims that the company is not obliged to pay.”
The official added that the company is paying attention to protecting consumers and this has been recognized by the Financial Supervisory Service, Korea’s financial watchdog.
Critics respond that the ratios of other non-life insurers also include invalid claims that they do not have to pay. In other words, the general insurance association was comparing apples to apples and Hyundai Marine was the worst.