8 Non-Life Insurers' Net Profit Decreases by 900 Billion Won... 'Auto Insurance and Real Loss Ratios Increase'
[Asia Economy Reporter Oh Hyung-gil] The non-life insurance industry saw a decrease in profits exceeding 900 billion KRW last year. The deficits in automobile insurance and indemnity medical insurance widened.
According to disclosures from each company on the 16th, the combined net profit of eight non-life insurers?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, Meritz Fire & Marine Insurance, Lotte Insurance, Hanwha General Insurance, and Heungkuk Fire & Marine Insurance?was 1.7573 trillion KRW last year, down 945.1 billion KRW (35.0%) from the previous year (2.7024 trillion KRW).
This sharp decline in performance was due to increased deficits in both automobile insurance and indemnity insurance. Last year, the operating loss in automobile insurance is estimated to have exceeded 1.6 trillion KRW.
The loss ratio for indemnity insurance rose by 9.1 percentage points to 130.9% up to the third quarter of last year, compared to 121.8% in 2018.
Samsung Fire & Marine Insurance's net profit plunged 39.5%, from 1.0707 trillion KRW in 2018 to 647.8 billion KRW last year. The 'Big 4'?Hyundai Marine & Fire Insurance (-28.0%), DB Insurance (-27.9%), and KB Insurance (-10.6%)?also saw their net profits shrink last year.
Meritz Fire & Marine Insurance was the only company to improve its performance last year. Its net profit increased by 28.4% year-on-year to 301.3 billion KRW, surpassing KB Insurance (234.3 billion KRW) and Hyundai Marine & Fire Insurance (269.1 billion KRW) to rank third in the industry.
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Lotte Insurance and Hanwha General Insurance also turned to losses last year. Lotte Insurance underwent a large-scale voluntary retirement program after being sold to a private equity fund last year, resulting in a significant increase in one-time expenses such as sale compensation and retirement benefits.
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