Although much health services research has been conducted using national health insurance claimsdata in Korea, the validity of this method has not been ascertained. The objective of this study was tovalidate the use of claims data for health services research by comparing incidence rate of cancers foundusing insurance claims data against rates of the national cancer registry of Korea. An algorithm to estimateincidence rates using claims data was developed and applied. The claims data from 2005-2008 were acquiredand the patients admitted to hospitals due to cancer in 2008 without admission to hospital from 2005-2007 by the same diagnosis code were regarded as incident cases. The acquired results were comparedwith the values from the National Cancer Registry of Korea. The incidence rate of all cancers found usingclaims data was 363.1 per 100,000 people, which is very similar to the 361.9 per 100,000 rate of the nationalcancer registry. Also the age-, gender- and disease-specific rates between the two data sources were similar.Therefore, national health insurance claims data may be a worthwhile resource for health services researchif appropriate algorithms are applied, especially considering the cost effectiveness of this method.