Insurers Show Strong Performance in Q3... Will Pressure to Lower Car Insurance Premiums Increase? (Comprehensive)

Samsung Fire & Marine Insurance, Hyundai Marine & Fire, DB Insurance, Meritz Fire & Marine Show Strong 3Q Performance
Improvement in Auto Insurance Loss Ratio Contributes

[Asia Economy Reporter Ki Ha-young] This year, non-life insurance companies have recorded strong performance through the third quarter, raising expectations for increased pressure to reduce automobile insurance premiums.

According to the non-life insurance industry on the 12th, Samsung Fire & Marine Insurance's cumulative net income for the third quarter of this year was 1.0222 trillion KRW, a 62.5% increase compared to the previous year. Its pre-tax profit on a separate basis through the third quarter surged 60.8% year-on-year to 1.3884 trillion KRW.

The combined ratio (loss ratio + expense ratio), which measures insurance business efficiency, decreased by 2.7 percentage points from the previous year to 101.5%, due to a reduction in loss ratios for general insurance and automobile insurance. Looking at the loss ratio, automobile insurance achieved 79.2%, down 5.6 percentage points from last year, due to fewer accidents caused by the COVID-19 pandemic.

Hyundai Marine & Fire Insurance's cumulative net income for the third quarter this year was 387.7 billion KRW, a 23.2% increase compared to the same period last year. The combined ratio for general insurance (loss ratio + expense ratio) improved by about 15 percentage points due to the absence of large-scale accidents. Automobile insurance also recorded a combined ratio of 95.9%, as traffic accidents decreased due to the COVID-19 pandemic and internet channel sales increased.

DB Insurance's cumulative net income for the third quarter this year was 645.5 billion KRW, a 46% increase compared to the same period last year. The automobile insurance loss ratio for the cumulative third quarter was 77.9%. Meritz Fire & Marine Insurance also achieved a cumulative net income of 467.3 billion KRW for the third quarter this year, a 44.4% increase compared to the same period last year.

As major non-life insurers record strong performances, demands from automobile insurance consumers for premium reductions are expected to intensify. The non-life insurance industry views the appropriate loss ratio for automobile insurance to be around 82?83%. As of the third quarter this year, the automobile insurance loss ratios for Samsung Fire & Marine Insurance, DB Insurance, and Hyundai Marine & Fire Insurance are all below 80%, indicating profitability. Except for 2017, insurers have suffered losses in automobile insurance every year over the past decade.

However, insurers are leaning towards maintaining premiums rather than reducing them, attributing the decrease in loss ratios to temporary factors such as reduced traffic volume and social distancing due to COVID-19. In particular, with the recent phased recovery to normal life (With COVID-19), concerns have been raised that traffic accidents may increase, potentially worsening performance again next year.

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