According to Korean regulator Financial Supervisory Service (FSS), fraudulent insurance scammers claimed an all-time high of KRW798.2bn ($698m) in 2018, up 9.3% from the previous year. Out of the total fraud amount, FSS identified KRW130bn through its own investigation while insurance companies identified KRW670bn.

False insurance claims in South Korea have increased due to high-tech and diversified scams, according to Maeil Business News Korea.

Industry experts said that the actual amount of fraudulent insurance claims could be even higher given that only a fraction of scammers had been exposed. They warned that growing fraud would undermine the financial strength of insurers and in the end this could affect policy holders as insurance fees would increase.

In Korea, insurance claims can be held back if an insurance company has reasonable grounds for suspecting fraud. The company can report the claim to the Financial Services Commission or investigative institutions like the police and prosecutors.

To combat insurance fraud, in March 2016, Korean lawmakers strengthened penalties for those convicted of the crime. The law also penalises those who have not actually followed through with insurance fraud but made an attempt at it. Under the law, the maximum prison sentence for insurance fraud is 10 years with a maximum fine of KRW50m.