'Big 4' Auto Insurance Loss Ratio in the 70% Range... Holding Steady in June as Well

Maintaining a Loss Ratio Around 77%... Stable Following Last Year
July Expected to Rise... Impact of Monsoon and Heavy Rainfall

The combined loss ratio (the ratio of claims paid to premiums received) of the top four non-life insurance companies, which hold about 85% of the automobile insurance market share, remained stable in the high 70% range. From July, the loss ratio is expected to rise due to increased damage caused by heavy rains.

According to the industry on the 18th, the average automobile insurance loss ratio of the four major non-life insurers?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance?was recorded at 77.2% last month. Although this is a 2.0 percentage point increase compared to the same month last year, it remains at a stable level. The cumulative loss ratio for the first half of this year was 77.1%, rising only 0.5 percentage points compared to the same period last year. Typically, the loss ratio range for automobile insurance where insurers do not incur losses is around 78?82%.

By company, Hyundai Marine & Fire Insurance had a loss ratio of 77.6%, DB Insurance 77.5%, Samsung Fire & Marine Insurance 77.3%, and KB Insurance 77.0%. Samsung Fire & Marine Insurance, DB Insurance, and KB Insurance saw increases of about 0.3 to 3.1 percentage points, while Hyundai Marine & Fire Insurance was the only company to see a decrease of 1.5 percentage points.

By company, Samsung Fire & Marine Insurance was the only one to decrease by 0.8 percentage points year-on-year, recording 77.5%. DB Insurance had the lowest loss ratio among the big four at 77.0%, but its year-on-year increase was the largest at 5.1 percentage points. Hyundai Marine & Fire Insurance had the highest loss ratio among the big four at 78.5%. KB Insurance recorded 77.7%, up 2.8 percentage points compared to the same month last year.

The industry had concerns that the loss ratio would rise further due to factors such as increased repair costs caused by inflation this year, reductions in automobile insurance premiums, and increased mobility following the end of the COVID-19 situation, but it appears to have maintained a stable level. The improvement of systems to prevent excessive treatment of minor injuries also seems to have had an impact.

However, the loss ratio is expected to inevitably rise next month. This is because vehicle damage caused by heavy rains is increasing across the country. According to the industry, from the 27th of last month until 9 a.m. today, 1,355 vehicle damage cases were reported to 12 automobile insurance sellers due to the rainy season and heavy rains. The estimated loss amount is about 12.8 billion KRW.

[Image source=Yonhap News]

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