"Despite COVID-19 Resurgence, Vehicle Use and Medical Visits Increase... Insurance Companies Face Difficulty Improving Profits"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Although COVID-19 is resurging, the reduction effect on vehicle traffic and medical usage is not as significant as in the early stages of the outbreak, leading to forecasts that loss ratios for auto insurance and health insurance will not improve.

Kim Se-jung, a research fellow at the Korea Insurance Research Institute, stated on the 29th in the report titled "COVID-19 Resurgence and Changes in Activity Related to the Insurance Industry," "It is difficult to expect the profitability improvement seen as a COVID-19 rebound effect to be sustainable."

According to the report, in March last year, the early stage of the COVID-19 spread, both vehicle traffic and medical usage sharply decreased by about 10%, showing a sensitive reaction to the spread of COVID-19.

However, recently, despite the resurgence of COVID-19, vehicle traffic and medical usage have not shown a significant decline as seen in the early stages of the COVID-19 spread, indicating a decreased sensitivity to the COVID-19 epidemic.

Since April this year, the number of confirmed COVID-19 cases has been high at 300 to 600, but traffic volume exceeded the 2019 monthly average traffic volume of 9 million vehicles before COVID-19, and in June 2021, just before the 4th wave, it increased significantly to 9.8 million vehicles.

Total card usage at medical institutions also decreased by 11% year-on-year in March 2020 during the first wave, dropped by 3.2% in August 2020 during the second wave, and continued to decline from October 2020 to February 2021 around the third wave.

However, medical usage in March and April this year has shown a significant increase compared to previous years, even considering the base effect.

Researcher Kim suggested, "Despite the resurgence of COVID-19 and the rapid increase in confirmed cases, traffic volume and medical usage are gradually recovering, making it difficult to reproduce the exceptional profitability improvement seen last year. It is clear that difficulties in face-to-face sales may continue for a considerable period, so the insurance industry must continue efforts to improve its structure."

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