[Edaily Reporter Park Soon-yeop] Analysts predict that the loss ratio for indemnity health insurance at property and casualty insurers will begin to improve in earnest starting next month, as managed care benefits are applied to manual therapy. The assessment is that limiting the price and frequency of manual therapy—which had the largest share of indemnity insurance payouts among individual non-covered items—could lead to an immediate decline in the loss ratio.
In a report released on the 12th, Lim Hee-yeon, an analyst at Shinhan Investment Securities, stated, “A significant improvement in the loss ratio for actual expense insurance will begin in earnest starting in July,” and maintained an “Overweight” investment rating for the non-life insurance sector. She identified #Hyundai Marine & Fire Insurance as a stock set to benefit from the improvement in the actual expense insurance loss ratio.

With the implementation of the managed care system starting July 1, the medical fee for a single 30-minute session of manual therapy has been set at 43,850 won. Manual therapy can be billed for no more than twice a week and no more than 15 times a year, though up to 24 sessions may be permitted based on medical judgment. If the annual limit is exceeded, coverage under non-reimbursable services for disease treatment will not be available.
The eligibility criteria for manual therapy will also be tightened. As a general rule, patients must undergo at least four sessions of basic physical therapy and simple rehabilitation therapy over a minimum period of two weeks prior to receiving manual therapy. Manual therapy will be covered by insurance only if there is no improvement after this period. While manual therapy may be provided on a non-covered basis for reasons such as simple fatigue or lethargy, it is not considered therapeutic treatment and therefore is not covered by indemnity health insurance.
Shinhan Investment Securities predicted that medical institutions’ incentive to provide manual therapy would weaken, considering factors such as price and session limits, prerequisite treatment requirements, and reporting obligations. Furthermore, the firm judged that demand is also likely to decline as non-therapeutic manual therapy is excluded from indemnity insurance coverage. This creates a structure where both supply and demand are simultaneously contracting.
Manual therapy has historically accounted for the largest share of indemnity insurance payouts. In 2024, indemnity insurance payouts for manual therapy from 14 non-life insurance companies totaled 1.4 trillion won, making it the largest single non-covered item. According to the Health Insurance Review and Assessment Service’s non-covered service reporting standards, monthly manual therapy costs amount to approximately 120 billion won, with the annual market size estimated at 1.4 trillion to 1.5 trillion won.
The market size is expected to shrink significantly following the implementation of managed care. The Ministry of Health and Welfare estimated that the annual financial burden on the National Health Insurance system after the implementation of managed care would range from 20.8 billion to 33.7 billion won. Calculating backward from a 5% National Health Insurance co-payment rate, the size of covered medical expenses is estimated to be between 416 billion and 674 billion won. This amounts to only 30–50% of the existing manual therapy market size. Analysts suggest that the actual decline in claims under indemnity insurance could be even greater when considering the deductible under such policies.
The improvement in the loss ratio is expected to be concentrated in July. Immediately after the system’s implementation, new patients will be ineligible for manual therapy coverage for at least two weeks. Starting from the third week of July, patients who meet the prerequisite treatment requirements will gradually enter the system, and the number of procedures will recover progressively. However, considering the reduction in per-session treatment costs, the decline in high-frequency claimants, and the contraction of supply from medical institutions, the rebound in the loss ratio is likely to be limited.
However, it remains to be seen whether the system’s effects will be permanent. Demands for system revisions due to restricted access to treatment for severe and chronic patient groups, a “balloon effect” shifting toward other non-covered items, and three-year periodic reevaluations could all act as factors leading to an expansion of insurance payouts in the future. Nevertheless, Shinhan Investment Securities assessed that the inclusion of non-covered items—which had previously been in a regulatory blind spot—into the formal system is a positive development.
Among non-life insurers, Hyundai Marine & Fire Insurance was highlighted as a potential beneficiary. Shinhan Investment Securities maintained its “Buy” rating and target price of 45,000 won for Hyundai Marine & Fire Insurance. Hyundai Marine & Fire Insurance’s underwriting profit for 2026 is projected to reach 766.7 billion won, a significant improvement from the previous year’s 396.1 billion won. During the same period, operating profit is estimated to rise from 726.4 billion won to 1.1394 trillion won, and net income is expected to increase from 561.1 billion won to 826.0 billion won.
The firm also maintained a “Buy” rating on #Samsung Fire & Marine Insurance and #DB Insurance. It set a target price of 685,000 won for Samsung Fire & Marine Insurance and 220,000 won for DB Insurance. For Hanwha General Insurance, the firm maintained a “Trading Buy” rating and a target price of 7,000 won.
Analyst Lim explained, “The trajectory of the loss ratio following the introduction of managed benefits will see a sharp drop in July followed by a gradual recovery, but it will take an asymmetric form where it fails to return to previous levels.” He added, “While the decline in the loss ratio is immediate and structural due to price and frequency limits, the recovery is likely to be gradual and partial, driven by the balloon effect and relaxed standards.”