Surge in Chinese Hospitalization Claims Poses Verification Challenges for Japanese Life Insurers

TOKYO, Jul. 9 (CNA) -- Japanese life insurance companies are facing increasing difficulties in verifying claims for hospitalization benefits, particularly those originating from China, as the number of such claims has surged in recent years.

According to major Japanese life insurers, claims for "one-time hospitalization benefits" filed by individuals who were hospitalized in China have seen a dramatic increase. For the 2025 fiscal year, the number of related claims reached 15,000, an increase of 2,000 from the previous year. This represents a staggering 23-fold rise compared to fiscal year 2022, when the issue first began to surface.

The Asahi Shimbun reported that Japanese private medical insurance policies generally cover individuals residing in Japan, regardless of nationality. Even if treatment is received overseas, policyholders can claim one-time hospitalization benefits by submitting proof of hospitalization. An anonymous executive at a major life insurance company responsible for claims processing stated, "We are struggling to balance the need for prompt payment of insurance benefits to our clients with the necessity of conducting thorough investigations."

Life insurers have observed that the rapidly increasing number of claims in recent years often involves policyholders undergoing short-term hospitalizations at medical facilities in China before returning to Japan to file claims. Many of these cases involve minor ailments such as gastroenteritis, which could typically be treated with outpatient care in Japan and would not normally require hospitalization. However, patients have opted for hospitalization in China.

Insurers suspect that some of these cases may involve arranged hospitalizations solely to claim the one-time hospitalization benefit, but verifying the actual circumstances is proving to be difficult.

The executive pointed out that the typical one-time hospitalization benefit amount is around 200,000 yen (approximately 40,000 New Taiwan dollars). However, investigating a single suspicious overseas claim can cost an average of 100,000 yen. "Overseas investigations incur significantly higher costs due to differences in countries and languages, sometimes exceeding the insurance benefit amount itself. Therefore, determining the extent of investigation required remains a persistent challenge."

Furthermore, following controversies over claim denials in the 2000s, the Japanese life insurance industry has been emphasizing rapid claims processing services in recent years. The executive admitted, "The most difficult practical challenge is how to protect policyholders' rights and ensure prompt benefit payments while simultaneously conducting necessary verifications."

To address the rise in such claims, one major life insurance company introduced a specialized diagnosis form to be completed by local physicians for hospitalization cases involving specific diseases in China last year. This measure aims to strengthen the claims review process and prevent potential abuse of the hospitalization system for insurance payouts. (Editor: Wei Shu) 1150709

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