Battery Also Drained in Icy Road Accidents... "Only Emergency Dispatches Due to Heavy Snow" (Summary)

50,000 Accident Reports in 3 Days
240,000 Emergency Dispatch Services

Snow has fallen across the country on the 17th, turning Gyeongbokgung Palace in Jongno-gu, Seoul, white. Photo by Moon Honam munonam@

[Asia Economy Reporter Oh Hyung-gil] As the new year begins, the Arctic cold wave with wind chills dropping below minus 20 degrees Celsius combined with heavy snowfall has put non-life insurance companies on high alert.

With an increase in vehicle accidents on icy roads and sudden heavy snowfall and rapid temperature drops leading to emergency towing and battery discharges, there has been a surge in automobile accident reports and emergency dispatch service usage.

As the severe cold wave is expected to continue until next week, it is anticipated that the scale of damage for non-life insurers will also increase. There are concerns that the automobile insurance loss ratio, which had stabilized during the COVID-19 pandemic, will be adversely affected.

According to the Korea Non-Life Insurance Association on the 8th, the number of automobile insurance accident reports received by 11 domestic non-life insurers from the 4th to the 6th reached about 49,000 cases in just three days. On the 6th, when heavy snowfall occurred, there were 17,136 cases, an increase of about 2,400 cases compared to the previous day (14,782 cases).

During the same period, the number of emergency dispatch service cases also reached about 243,000. Due to battery discharges caused by the cold wave, emergency dispatch requests for battery charging accounted for more than half, with about 159,000 cases over three days. Emergency towing also reached about 52,000 cases.

An industry official explained, "Accidents increased as heavy snowfall suddenly occurred during the evening rush hour when vehicle operation increases, and many customers requested emergency dispatch services due to battery discharges."

With the sharp rise in accidents and emergency dispatch service usage caused by the cold wave and heavy snowfall, attention is also focused on how much this will affect the automobile insurance loss ratio. From January to November last year, the cumulative automobile insurance loss ratio of nine domestic non-life insurers ranged from 81.5% to 106.1%, a decrease compared to the previous year's same period loss ratio of 87.5% to 118.3%.

By insurer, Samsung Fire & Marine Insurance's loss ratio dropped by 5.0 percentage points from 90.2% in 2019 to 85.2% last year. DB Insurance decreased from 90.6% to 84.4%, Hyundai Marine & Fire Insurance from 90.8% to 84.8%, and KB Insurance from 91.2% to 84.5%, each reducing by about 5 to 6 percentage points.

This is due to reduced vehicle use and fewer hospital visits as social distancing measures during COVID-19 increased the time people stayed at home. However, the loss ratio is still higher than the appropriate loss ratio range (77% to 80%).

An insurance industry official said, "Although the loss ratio improved last year, it only means losses have decreased, and the chronic deficit situation remains," adding, "It is also cautious to mention premium increases due to the COVID-19 rebound effect."

This content was produced with the assistance of AI translation services.